GFR December 2023

Government Finance Officers Association | DECEMBER 2023 

The potential of 

neurodiversity 

employment 

Government Finance Review 

How incentives and 

consequences can 

shape behavior 

Robotic process 

automation in action 

AWARDS FOR EXCELLENCE 

I N G O V E R N M E N T F 

I N A N C E 

Rising Above 

the Field 

The winners of this year’s Awards for Excellence 

exemplify how governments can innovate, 

grow stronger, and provide examples for others.

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contents DECEMBER 

2023 | VOLUME 39, NUMBER 6 

2023 

AWARDS 

for 

EXCELLENCE 

IN GOVERNMENT FINANCE 


CITY OF MONROVIA, CALIFORNIA 

I N G OV E R N M E N T F 

I N A N C E 

GUILFORD COUNTY, NORTH CAROLINA 

COVER ILLUSTRATION: ©2023 LEO ACADIA C/O THEISPOT.COM 

TOWN OF FULTON, TEXAS 

VERMONT BOND BANK 

14 

2023 GFOA Awards 

for Excellence in 

Government Finance 

We celebrate the six winners of 

this year’s Award for Excellence 

for their creative solutions 

to common challenges, 

commitment to GFOA best 

practices and outstanding 

financial management. 

By Jara Kern 

TRI-COUNTY METROPOLITAN 

TRANSPORTATION DISTRICT OF OREGON 

TOWN OF PECOS CITY, TEXAS 

DECEMBER 2023 | GOVERNMENT FINANCE REVIEW 1

contents 

36 

Brain Power 

The why and how of 

neurodiversity employment 

in local government 

By Anthony Pacilio and 

Matthew Peters 

40 

Incentives & 

Consequences 

Are you setting your 

team up for success? 

By Kate Zabriskie 

44 

Persistence Pays Off 

How a decade of risk-aware 

reserves management 

has benefited the City of 

Sharonville, Ohio 

By Shayne Kavanagh and 

Scott McKeehan 

50 

Robots Record Our Revenue 

How the Washtenaw County, 

Michigan, Treasurer’s Office used 

robotic process automation to save 

time, reduce errors and improve the 

timeliness of financial reporting. 

By Catherine McClary 

©2023 ALEX NABAUM C/O THEISPOT.COM 

2

STATEMENT OF OWNERSHIP, MANAGEMENT, AND CIRCULATION 

6 Contributors 

8 From the CEO 

10 Rewind: A Look Back at GFR 

in May 1965 

11 GFOA Works with Aon to 

Help Local U.S. Governments 

Mitigate Natural Disaster Risk 

12 GFOA’s Fiscal Fluency Challenge 

13 GFOA Launches Online 

Academic Journal 

55 Strategy and Evaluation Leads to 

Trust and Better Decision-Making 

By Adam Powell 

58 Accounting and Financial Reporting 

When Multiple Governments Within 

One Financial Reporting Entity 

Are a Single Employer for a PEB Plan 

By Michele Mark Levine, Todd Buikema, 

and Susannah Filipovic 

62 The Importance of Protecting 

Auditor Independence 

By Katherine Barrett & Richard Greene 

64 Financial Intelligence through 

Artificial Intelligence 

By Justin Marlowe 

66 Interview with Chris Forster, 

assistant town manager for the 

Town of Bluffton, South Carolina 

By Mike Mucha 

72 10 Steps to Implementing 

Position Control 

66 

1 Publication Title: Government Finance Review 

2 Publication Number: 3681-20 

3 Filing Date: September 30, 2023 

4 Issue Frequency: Bimonthly (February, April, June, August, October, December) 

5 Number of Issues Published Annually: Six 

6 Annual Subscription Price: $35 

7 Complete Mailing Address of Known Office of Publication: Government Finance Officers 

Association, 203 N. LaSalle St., Suite 2700, Chicago, IL 60601 

8 Complete Mailing Address of Headquarters or General Business Office of Publisher: 

Government Finance Officers Association, 203 N. LaSalle St., Suite 2700, Chicago, IL 60601 

9 Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: 

Publisher: Chris Morrill, CEO, Government Finance Officers Association, 203 N. LaSalle 

St., Ste. 2700, Chicago, IL 60601; Editor: Michael J. Mucha, Director, Government Finance 

Officers Association, 203 N. LaSalle St., Ste. 2700, Chicago, IL 60601; Managing Editor: 

Marcy Boggs, Government Finance Officers Association, 203 N. LaSalle St., Ste. 2700, 

Chicago, IL 60601 

10 Owner: Government Finance Officers Association 

Complete Mailing Address: 203 N. LaSalle St., Ste. 2700, Chicago, IL 60601-1210 

11 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or 

More of Total Amount of Bonds, Mortgages, or Other Securities: None 

12 Tax Status: Has Not Changed During Preceding 12 Months 

13 Publication Title: Government Finance Review 

14 Issue Date for Circulation Data Below: August 2023 

15 Extent and Nature of Circulation: 

Average No. 

Copies Each 

Issue During 

Preceding 12 

Months 

No. Copies of 

Single Issue 

Published 

Nearest to 

Filing Date 

a. Total Number of Copies (Net press run) 23,612 24,202 

b. Paid 

Circulation 

(By Mail and 

Outside the 

Mail) 

(1) Mailed Outside-County Paid Subscriptions 

Stated on PS Form 3541 (Include 

paid distribution above nominal rate, 

advertiser’s proof copies, and exchange 

copies) 

(2) Mailed In-County Paid Subscriptions Stated 

on PS Form 3541 (Include paid distribution 

above nominal rate, advertiser’s proof 

copies, and exchange copies) 

(3) Paid Distribution Outside the Mails 

Including Sales Through Dealers and 

Carriers, Street Vendors, Counter Sales, and 

Other Paid Distribution Outside USPS® 

(4) Paid Distribution by Other Classes of Mail 

Through the USPS (e.g., First-Class Mail® 

417 404 

22,356 23,404 

c. Total Paid Distribution [Sum of 15b (1), (2), (3), and (4)] 23,808 23,772 

d. Free or 

Nominal Rate 

Distribution 

(By Mail and 

Outside the 

Mail) 

(1) Free or Nominal Rate Outside-County Copies 

included on PS Form 3541 

(2) Free or Nominal Rate In-County Copies 

Included on PS Form 3541 

(3) Free or Nominal Rate Copies Mailed at Other 

Classes Through the USPS (e.g., First-Class 

Mail) 

(4) Free or Nominal Rate Distribution Outside 

the Mail (Carriers or other means) 

e. Total Free or Nominal Rate Distribution [Sum of 15d (1), (2), (3) 

and (4)] 

n/a 

n/a 

n/a 

n/a 

n/a 

n/a 

n/a 

n/a 

n/a 

n/a 

416 414 

416 414 

f. Total Distribution (Sum of 15c and 15e) 23,131 23,818 

g. Copies not Distributed (See Instructions to Publishers #4 

(page #3)) 

481 384 

h. Total (Sum of 15f and g) 23,131 24,202 

i. Percent Paid (15c divided by 15f times 100) 99% 99% 

16 Electronic Copy Circulation: 

a. Paid Electronic Copies n/a n/a 

b. Total Paid Print Copies (Line 15c) + Paid Electronic Copies 

(Line 16a) 

c. Total Print Distribution (Line 15f) + Paid Electronic Copies 

(Line 16a) 

d. Percent Paid (Both Print & Electronic Copies) (16b divided 

by 16c x 100) 

23,808 23,773 

23,131 23,818 

99% 99% 

17 Publication of Statement of Ownership: If the publication is a general publication, publication 

of this statement is required. Will be printed in the December2023 issue of this publication. 

18 Signature and Title of Editor, Publisher, Business Manager, or Owner 

Marcy Boggs: I certify that all information furnished on this form is true and complete. 

I understand that anyone who furnishes false or misleading information on this form or who 

omits material or information requested on the form may be subject to criminal sanctions 

(including fines and imprisonment) and/or civil sanctions (including civil penalties). 


Publisher 

Chris Morrill 

Editor in Chief 

Michael J. Mucha 

Managing Editor 

Marcy Boggs 

GOVERNMENT FINANCE REVIEW 

www.gfoa.org/gfr 

EDITORIAL 

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ADVERTISING 

gfoa.org/gfr-ads 

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gfr@gfoa.org 

CHANGE OF ADDRESS 

gfoa.org/update-membership 

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GFOA encourages finance officers, scholars, 

private consultants, and other knowledgeable 

individuals to submit manuscripts to GFR. 

All manuscripts should conform to the Editorial 

Policy and Guidelines for Authors, which are 

available online at gfoa.org. Manuscripts should 

be submitted electronically to gfr@gfoa.org. 

CONTACT 

Government Finance Review 

c/o Government Finance Officers Association 

203 N. LaSalle Street, Suite 2700 

Chicago, Illinois 60601-1210 

Phone: 312-977-9700 

Fax: 312-977-4806 

GFOA EXECUTIVE BOARD 

Laura Allen 

President 

Maryland Department of 

Budget and Management, MD 

Terri Velasquez 

Past President 

City of Aurora, CO 

Tanya Garost 

President-Elect 

City of Martensville, SK 

Sonya Andrews 

City of Scottsdale, AZ 

Lunda Asmani 

Norwalk Public Schools, CT 

Jennifer Brown 

City of Sugar Land, TX 

Timothy Ewell 

County of Contra Costa, CA 

Edwin Gin 

Bruce H. Fisher 

Nova Scotia Utility and 

Review Board, NS 

Jason Greene 

City of Miami Beach, FL 

Anne P. Harty 

City of Rock Hill, SC 

Sue Iverson 

City of Red Wing, MN 

Grace Martinez 

Metropolitan Transportation 

Commission, CA 

Debra Roberts 

Maryland Teachers & State 

Employees Supplemental 

Retirement Plans, MD 

David P. Schmiedicke 

City of Madison, WI 

Kendel Taylor 

City of Alexandria, VA 

Diane Waldron 

City of Bristol, CT 

Chris Morrill 

GFOA 

GFR (Government Finance Review) (ISSN 0883-7856) is published bimonthly in February, April, June, August, October, and December. 

Subscription price is $35 annually. Opinions expressed herein are the viewpoints of the authors. They may differ from the policies and 

recommendations of the Government Finance Officers Association, its committees, and staff. Letters to the editor are welcomed. 

Copyright 2023 by the GFOA. Published by the Government Finance Officers Association, 203 N. LaSalle Street, Suite 2700, Chicago, 

IL 60601-1210. Periodicals postage paid at Chicago, Illinois, and additional mailing office. Postmaster: Please send address changes 

to Government Finance Review, 203 N. LaSalle Street, Suite 2700, Chicago, IL 60601-1210. 

4

800 

Accve CPFOs 

+ 

“If you are interested in highly relevant 

professional development, the 

CPFO program delivers.” 

Brian Caputo, Ph.D., CPFO, President, College of DuPage, IL 

Cerrficaaon. Career. Community. 

Start your own cerrficaaon 

journey today at 

gfoa.org/cpfo

CONTRIBUTORS 

Shayne Kavanagh is the senior manager of research for GFOA. He started GFOA’s long-term financial planning and 

policy consulting offering in 2002 and has been working with governments on financial planning and policies ever 

since. Most recently, Kavanagh has pioneered the use of computer simulation to “stress test” the long-term financial 

position of local governments. He is also the author of a number of influential publications on financial planning 

and budgeting. His work has earned him a fellowship with the National Academy of Public Administration, a 

position on the board of advisors for the University of Chicago’s Center for Municipal Finance, and recognition as 

one of the 100 most influential people in local government by Engaging Local Government Leaders. 

Jara Kern is a writer and marketing strategist with Right Angle Studio, a Chicago-based graphic design firm. 

For this issue of Government Finance Review, she interviewed representatives from the governments and 

organizations that have been recognized with 2023 GFOA Awards for Excellence. Kern holds an MBA from the 

University of Wisconsin-Madison and an undergraduate degree in classical music performance from the Oberlin 

Conservatory of Music at Oberlin College. 

Catherine McClary is the treasurer of Washtenaw County, Ann Arbor, Michigan. She is also a member of the 

GFOA Committee on Treasury & Investment Management. McClary was involved in the effort to implement 

robotic process automation to Washtenaw County and was recognized with 2022 GFOA Award for Excellence. 

She has served as president of the Michigan GFOA Board of Directors, and last year received GFOA’s Hero Award. 

If you have questions about Treasury initiatives, email the office at taxes@washtenaw.gov. 

M. Scott McKeehan, CPA, is the finance director for the City of Sharonville, Ohio. He is responsible for maintaining 

the city’s budget management, general ledger, accounts payable and receivable, and debt management, and for 

managing the city’s investment portfolio. Over the 11 years he’s served in this role, the city has overcome a capital 

backlog stemming from the Great Recession while meeting fund balance goals. Prior to joining the team at the city, 

McKeehan worked 12 years at the Ohio Auditor of State office. 

Anthony Pacilio, vice president of CAI Neurodiverse Solutions, is recognized domestically and internationally 

as an expert in neurodiverse employment. He specializes in advancing neurodiversity programs and leads the 

global expansion efforts of Neurodiverse Solutions at CAI. As the previous vice president and global head of 

autism at work for JPMorgan Chase & Co., Pacilio brings a wealth of experience to CAI Neurodiverse Solutions. 

He has expertise in managing neurodiversity recruiting efforts, developing candidate pipelines, and ensuring 

best practices for onboarding support, training, and organizational success. Throughout his career, he has 

held technical and commercial roles at MBNA America, Bank of America, and CIGNA. 

Matthew Peters is chief technology officer for CAI Neurodiverse Solutions, where he is responsible for enterprise 

technology, infrastructure, security operations, and all technical consulting practices. Peters provides strong 

leadership across the enterprise and ensures that all CAI technology stacks are modernized and prepared for the 

company’s planned future growth and scale, and he continuously searches for new, innovative ideas. Peters has 

served in other roles at CAI, including vice president of technology, executive director of intelligent automation, 

and co-director of CAI Labs; he was also responsible for product development and technical consulting services. 

Kate Zabriskie is the president of Business Training Works, Inc., a Maryland-based talent development firm. 

She has consulted with organizations large and small to help define their cultures; articulate their missions, 

visions, and values; and align their employees’ performance with strategic goals and objectives. She and her 

team provide onsite, virtual, and online soft-skills training courses and workshops to clients in the United 

States and internationally. Clients have included Georgetown University, the U.S. Coast Guard, and Microsoft. 

6

In-Person Training 

Join GFOA in Minnesota 

Featured Courses: 

Budget Academy, April 8–11 

Overview of Public Procurement, April 8–9 

Intermediate Governmental Accounnng, April 8–9 

Advanced Governmental Accounnng, April 10–11 

Best Praccces in Debt Issuance and Management, April 10–11 

gfoa.org/events

FROM THE CEO 

Christopher P. Morrill 

Executive Director/CEO 

F 

or many GFOA staff members, 

November marked the point 

when we could start officially 

looking forward to 2024. 

On November 3, we started 

taking registrations for our 2024 Orlando 

Annual Conference. While preparations 

for sessions, event spaces, technology, 

promotions, and logistics began months 

ago, now we find it hard not to get excited. 

Early registration numbers are strong, 

and we’re expecting one of the largest 

GFOA conferences ever. Not only is 

Orlando, Florida, a destination city with 

many attractions beyond the convention 

center, but the conference itself will also 

feature case studies from innovative and 

leading governments, sessions led by 

leading practitioners, updates on current 

issues, can’t-miss networking events, 

access to hundreds of exhibitors, and 

thought-provoking keynote speakers. We 

look forward to letting you know about all 

our plans in the months to come. 

And there are other reasons why 2024 

will be an important year for GFOA. We’re 

making plans to update our membership 

Saying Goodbye to 2023 

and Wishing You a Happy 2024 

model that will increase the size of GFOA 

and open the association up to finance 

professionals throughout a member 

organization. Our research shows us 

that in many organizations, only the 

most senior positions within the finance 

office hold official memberships. While 

many benefits of GFOA membership (like 

GFR) can be shared, others—like access 

to our GFOA communities—cannot. 

We expect this change to make GFOA’s 

network bigger, and it will also provide 

opportunities for professionals much 

earlier in their careers to benefit from 

education, networking, mentorship, and 

other resources from GFOA. 

Our plans for 2024 are rooted in a 

successful 2023, when we were once 

again able to increase both our individual 

and organization memberships. GFOA 

award program participation remains 

strong, registration for both in-person and 

virtual learning opportunities continues 

to grow—capped by the 5,000 individuals 

who signed up for our mid-December 

GAAP Update—and engagement in GFOA’s 

affinity groups and online communities 

We look forward to working 

with you in pursuit of our 

shared mission to advance 

excellence in public finance. 

is at an all-time high. And GFOA has made 

other accomplishments over the past 

year in each of our major program areas: 

• Leading our peer organizations in 

advocating for local governments on 

infrastructure funding and financial 

data transparency. 

• Completing the rollout of our 

awards management system for the 

Distinguished Budget Presentation 

Award. 

• Completing our revised CPFO program 

with all seven tests now available. 

• Hosting more than 5,600 delegates and 

exhibitors in Portland for our 2023 

annual conference. 

8

©2023 MICHAEL AUSTIN C/O THEISPOT.COM 

• Providing consulting services to more 

than 65 governments to assist with 

areas including ERP readiness, system 

selection, and implementation; 

business process improvement; and 

financial policy development. 

• Returning to a full schedule of 

in-person training events, which 

now feature regular offerings in our 

upgraded training facility in Chicago. 

• Launching the LGBTQIA+ Caucus. 

• Working with our partners at the 

International Association of Fire 

Chiefs (IAFC) to provide educational 

sessions that improve collaboration 

with our finance peers in the fire 

service. 

• Producing research reports that 

highlight decision architecture, 

budgeting for equity, reserve policies, 

public engagement, and fiscal fluency. 

• Publishing Accounting for Capital 

Assets. GFOA’s most recent publication 

is also available for sale as an e-book 

on the Amazon and Apple platforms. 

We’re also thankful to have so many 

dedicated and engaged volunteers 

who provide guidance on standing 

committees, participate in award 

reviews and research projects, and 

serve as instructors, authors, mentors, 

and leaders for this organization. If 

you are interested in getting more 

involved with GFOA, please visit 

GFOA.org/volunteer for a listing of 

current volunteer opportunities. If 

you’re interested in joining GFOA’s 

executive board, we’ll be accepting 

applications for the 2024 to 2026 

board term through February 2 at 

gfoa.org/executive-board-application. 

Thank you again for the service 

you provide to GFOA and to your 

community. We look forward to 

working with you in pursuit of our 

shared mission to advance excellence 

in public finance. 

Happy holidays and happy new year, 

Registration is now open for our 2024 

Annual Conference in Orlando. Register 

by January 26 to save: 

gfoa.org/conference 

Get involved! View our current volunteer 

opportunities: 

gfoa.org/volunteer 


ewind 

Instituting Real Estate Tax Collection Procedures 

A look back at GFR from May 1965 

The May 1965 issue of 

Municipal Finance (a 

stop in the magazine’s 

evolution into GFR) began 

with an article listing 

methods of collecting 

delinquent real estate taxes, focusing 

on the system Cook County, Illinois, 

had put in place the year before. 

The collection process was not robust 

(compared to 96 percent now). Penalties 

were being put in place for failure to pay 

on time, including potentially losing the 

property, but delinquency remained a 

serious problem. The article presented 

some methods of collecting unpaid real 

estate taxes and evaluated their efficacy. 

“The basic procedure for collecting 

delinquent real estate taxes in Illinois 

was developed during the territorial 

period,” according to the article. “This 

procedure was hardly changed until the 

1930s and 1940s, when it was modified 

to cope with the staggering amount of 

tax delinquency then current, as well 

as the growing number of chronically 

tax-delinquent parcels of property.” 

Tax delinquency dates. The tax lien 

of the state was attached to the real 

estate on January 1, with the tax lien 

becoming delinquent for the first 

installment of May 1, and on September 

1 for the second installment. 

Notice to tax-delinquent owners. 

The county collector was required 

to publish its intent to seek a tax 

judgment and an order to sell had to be 

published in a newspaper at least ten 

days before judgment was sought. 

The tax judgment. All applications 

for judgment and orders of sale were 

to be made at a specific time (during 

October) in Cook County. The county 

court examined the delinquency 

list and determined the matter in a 

summary manner without pleadings. 

The tax sale. The tax lien was offered 

at public auction, with a maximum 

penalty bid of 12 percent of the unpaid 

taxes per semiannual period. 

Methods of handling forfeited real 

estate. Seven procedures were available 

for collecting taxes on real estate that 

was forfeited to the state. Forfeiture 

didn’t mean the state owned the 

property, just that the taxes hadn’t been 

paid by either the owner or a tax buyer. 

1. The forfeiture sale. Forfeited tax liens 

could be offered at future tax sales 

or purchased by anyone applying to 

the county clerk for a tax certificate 

of sale after payment of all taxes due 

was made to the county collector. 

2. The civic-action-in-debt. The county 

board could file a civil suit for the 

total amount of the unpaid taxes. 

3. The “Three Officer Plan.” Whenever 

real estate taxes equal or exceed the 

value of the property, the county 

judge, county clerk, and county 

treasurer could approve its sale 

to the highest cash bidder. (This 

procedure was rarely used.) 

4. The tax foreclosure sale. The tax 

lien on forfeited property tax could be 

foreclosed in equity. When tax liens 

had been forfeited to the state for two 

or more years, they could be sold as 

ordered by the court. (This was the 

most commonly used procedure.) 

5. Receivership. Income-producing real 

estate that had been tax-delinquent 

for six months or more could be 

brought under the receivership of the 

county collector and remain under 

receivership until the rents, issues, and 

income taken from the management 

of the property satisfied the taxes due 

plus penalties and costs. 

6. The Scavenger Act. Real estate that 

had remained tax-delinquent for ten 

or more years could be sold at a public 

auction to the highest bidder for cash. 

(This procedure had never been used 

as of 1965.) 

7. The Blighted Vacant Areas 

Development Act. Private developers 

could acquire chronically taxdelinquent 

or otherwise encumbered 

real estate through the power of 

eminent domain, if the land was to be 

used for development and construction 

of housing units, public or private. 

“Government officials have met with 

much success by using foreclosure sales to 

reduce tax forfeitures 75 percent between 

1942 and 1961,” according to the article. 

10

In Brief 

PARTNERSHIPS | RESEARCH | RESOURCES 

PARTNERSHIPS 

GFOA Works with Aon to Help Local 

Governments Mitigate Natural Disaster Risk 

GFOA is teaming with 

Aon plc, a leading global 

professional services 

firm, on a first-of-its-kind 

initiative to provide local 

U.S. governments with state-of-the 

art tools to help them better analyze 

and plan their rainy day funds. 

Local government rainy day funds 

are critical for managing exposure to 

risks like economic downturns and 

natural disasters. According to a recent 

report from the National Oceanic 

and Atmospheric Administration 

(NOAA), the United States experienced 

18 billion-dollar disasters in 2022, 

totaling more than $165 billion in 

damage. The frequency of these costly 

disasters has been increasing in 

recent years, and the trend is likely to 

continue into the foreseeable future. 

When planning for potential 

disasters, local governments 

perennially ask themselves how much 

is enough to keep in the rainy day fund. 

To help answer this question, GFOA 

contracted with Aon to acquire access 

to data on natural disaster exposure 

in local communities, enabling GFOA 

to build risk models with comparable 

analytical techniques that insurance 

companies use to develop coverages. 

GFOA stores the data in a unique 

open standard, developed by 

ProbabilityManagement.org, a GFOA 

partner. This allows the data to be 

easily integrated into Microsoft Excel, 

providing users with full access to the 

range of Aon’s insights. 

In fact, Aon and GFOA have already 

completed a successful pilot of this 

project, using Aon’s data to build a 

risk model. “The City of Providence, 

Rhode Island, had a Rainy Day Fund 

Ordinance that had become antiquated 

and in need of update. As part of 

Results for America’s City Budgeting 

for Equity and Recovery program, we 

worked with GFOA to analyze what 

our reserve levels should be, create a 

comprehensive fund balance policy, 

and update the Rainy Day Ordinance. 

The team at GFOA was incredibly 

helpful and the data provided by Aon 

was critical in building the risk model 

we used for analysis. Using the model, 

we were able to create a fund balance 

policy that will protect our taxpayers 

against future economic shocks and 

protect its most vulnerable residents,” 

said Krystle Lindberg, deputy finance 

director and budget officer for the City 

of Providence. 


IN BRIEF 

“Working with risk strategy leader 

Aon will help us to accelerate our support 

of finance officers as they develop 

stronger rainy-day funds to protect 

their communities,” said Chris Morrill, 

GFOA’s chief executive officer. 

Liz Henderson, global head of 

climate for Aon’s Reinsurance Solutions, 

said: “Our data and analytics will enable 

state and local governments to navigate 

the volatility from natural disasters 

and climate change while providing 

the insights needed to shape better, moreinformed 

decisions. This initiative adds to 

Aon’s growing suite of climate analytics 

through a series of collaborations with 

leading academic institutions.” 

GFOA has a number of resources 

available now to help provide information 

on using risk based analysis. Please visit 

gfoa.org/risk-analysis to view research 

papers and best practices, explore case 

studies, and download sample models. 

This issue of GFR also contains an article 

highlighting the City of Sharonville’s 

approach to risk-aware management of 

reserves. GFOA’s consulting work with 

local governments has revealed that 

there are many opportunities for reserve 

optimization beyond the guidance 

provided by GFOA’s existing best practice. 

Should we rethink reserves? A recent 

GFOA research paper available on GFOA’s 

website brings together lessons learned 

from our members with university 

research to provide strategies for how 

local governments can get the most 

value from their reserve strategies. 

Read the research report: 

gfoa.org/materials/rethinkingreserves 

RESEARCH 

GFOA’s Fiscal Fluency 

Challenge 

Numbers are at the core of a public finance officer's job, and a big part 

of the job is communicating those numbers to other people. But 

many members of a finance officer’s audience don’t speak numbers 

as a first language. 

Numbers are abstract concepts. Abstractions require effortful 

thinking—which is why young children are taught to count objects, like fingers 

and toes, making the numbers more concrete. The numbers that public finance 

officers need to communicate often go well beyond what can be accommodated 

by fingers and toes; however, we can take a cue from childhood and transform 

numbers into human experience. 

GFOA is looking for outstanding examples of good communication of financial 

information using the principles described in our research report, “Fiscal Fluency 

Made Easy.” This could be a PowerPoint, a report, a video of the presentation 

being given at a meeting of the elected board, or whatever medium you think 

best captures how you’ve used the ideas of Fiscal 

Fluency. If you can also provide evidence that your 

presentation was effective in achieving the goals 

of the presentation, that increases your chances 

of winning! The Grand Prize is an all-expenses 

paid trip to GFOA's 118th Annual Conference in 

Orlando, Florida, June 9-12, 2024.Entries must be 

submitted by January 15, 2024. 

A Checklist for Fiscal Fluency 

Read the research report: 

gfoa.org/materials/fiscalfluency 

Join the Fiscal Fluency Challenge: 

gfoa.org/fiscalfluency 

The principles below are designed to help communicate with the fiscal fluency 

necessary for productive conversations and good decisions about public finance. 

Understand the limits of rationality. Human thinking is more automatic 

and less rational than we may think, often leading to an overestimation of 

people’s ability to grasp numbers. The presentation of numbers must be mindful 

of those limits. 

Translate numbers to human scale. Break numbers down to a level that people 

can easily relate to. For example, rather than using the total amount of money the 

public would pay for a new tax, show the impact per household. 

Help people grasp the numbers. Compare the numbers to those of familiar items 

and events in people’s lives. For example, compare the cost of a public service to 

the cost of consumer goods or services people are familiar with. 

Catalyze action with emotional numbers. When it is important to catalyze 

action, fuse the logic of numbers with a presentation that engages the emotions of 

the audience. For example, there might be opportunities to relate the numbers to 

something the audience will personally experience. 

Build a scale model. Use geospatial information on maps to help people visualize 

the impact of numbers on their communities. 

12

RESOURCES 

GFOA Launches Online Academic Journal 

GFOA is developing an 

online academic journal 

for peer-reviewed articles 

and research that 

examines and analyzes 

contemporary issues in budgeting and 

finance and explores potential solutions. 

GFOA and the Public Finance Journal are 

thrilled to announce cash awards for 

answering long-standing public finance 

questions. 

Public Finance Journal 

The Public Finance Journal will be 

published twice a year, creating a forum 

for finance officers to discuss significant 

issues that advance our scientific 

understanding. Articles will focus on 

originality, importance, interdisciplinary 

interest, timeliness, and accessibility, 

connecting the science with the practice 

in public budgeting and finance. 

The publication will address the 

needs and interests of academics and 

government finance leaders connected 

with the local or national academic 

community—that is, both public 

finance’s scientific and practitioner 

communities. Public Finance Journal 

will publish significant advances in the 

science of public finance that are both 

timely and of theoretical importance. 

The journal’s guiding principles are: 

• Public Finance Journal is an open 

access journal that is committed to 

the community of practice. 

• All articles published adhere to the 

standards of peer review and the 

ethical standards of the Committee 

on Publication Ethics. 

• The journal encourages the posting 

of open data and methods for all 

articles published. 

• Both replications and manuscripts 

with null results are important to the 

scientific process. 

GovFi Prize 

What if there were resources to support, 

recognize, and reward academic writing 

in public finance? There now is such 

financial resourcing for four specific 

questions. GFOA and Public Finance 

Journal will provide $500 in start-up 

funding for proposals that address one 

of the four initial proposals for each 

question below. The total prize amount 

available for each of the four questions 

is $8,000. The non-winning articles 

may also be published in the Public 

Finance Journal. In fact, GFOA would 

prefer to publish articles from multiple 

researchers on the same question— 

social science is hard and answers from 

research are rarely definitive, so having 

multiple perspectives on the same 

question is helpful. 

Question 1: Is the 80-20 Rule Operative 

for Financial Analysts’ Use of Financial 

Reports? 

The 80-20 rule says that 80 percent of 

outcomes result from 20 percent of all 

causes. Applied to financial reporting, 

this could mean that some fraction of the 

information contained in the financial 

report satisfies the vast majority of the 

questions professional analysts (for 

example, those who perform analysis as/ 

for bond market participants) have about 

a local government. GFOA wants to know 

the most common questions professional 

analysts have about local governments 

and the information they most 

commonly use from financial reports. 

We also want to know the extent to which 

the most commonly used information 

satisfies the financial analysts total 

informational needs—or put another way, 

what percentage of the outcome (such 

as completing the financial analysis) 

results from the most commonly used 

information? 

Question 2: What is the Cost of 

Complying with GAAP Accounting 

and Reporting Standards? 

GAAP accounting standards often require 

governments to collect, prepare, and 

report information that they otherwise 

would not. This adds a new or marginal 

cost to finance administration that 

would otherwise not exist. GFOA wants 

to know the marginal cost of complying 

with new reporting standards, including 

staff time, consulting time (including 

external auditors and other accounting 

service providers), software, and any 

other relevant costs. We are interested in 

total costs, include staff time, software 

upgrades, and consultant support, 

after the standard is “live.” We are also 

interested in seeing data from a random 

selection of governments, or at least 

reasonably representative of the range of 

capabilities that local governments need 

to implement new standards. 

Question 3: What Does the Public Really 

Want to Know About Public Finance? 

Financial transparency is important 

but is often undertaken without a firm 

understanding of what the public most 

wants to know about their government’s 

finances. GFOA wants to know what 

information about public finances 

would do the most to reduce the public’s 

uncertainty about the trustworthiness 

of their local government as stewards 

of their tax dollars. What do citizens/ 

taxpayers want to know about local 

government finance? How do they 

define accountability for the use of their 

tax dollars? 

Question 4: Do Financial Reports 

Impact Policy Making? 

Elected officials need to know about 

the financial condition of their 

governments. GFOA wants to know 

what information about public finances 

gives elected officials the most 

confidence that they are succeeding in 

their role of stewards of public finances. 

What do elected officials want to know 

about local government finance? 

How do they define accountability for 

the use public funds? 

Learn more about the first issue of the 

Public Finance Journal: 

gfoa.org/publicfinancejournal 

Read more about the GovFiPrize: 

gfoa.org/govfi-prize 


2023 

AWARDS 

for 

EXCELLENCE 

IN GOVERNMENT FINANCE 


I N G O V E R N M E N T F 

I N A N C E 

BY JARA KERN 

“The secret of change is to focus all of your energy 

not on fighting the old, but on building the new.” 

From the vantage point of two millennia ago, the Greek 

philosopher Socrates could not have imagined our world 

today. He certainly, however, had the right idea about 

change—that in embracing it, we can find new and 

improved ways of working and serving our communities. 

The six winners of the 2023 GFOA Awards for Excellence 

in Government Finance are examples, above all, of what 

comes from embracing change. These include stories 

of resilience, financial stewardship, and community 

consensus that help one town recover after a natural 

disaster, while another makes a generational investment 

in the future. In others are lessons in how embracing 

emerging technologies unlock fiscal transparency 

and staff productivity. Finally, awardees also share 

how taking innovative approaches to some of 

the most pressing issues we face today—climate 

change and equity—can move us all forward. 

These six winners were selected from entries across 

a diverse set of governments and agencies in the 

United States and Canada. Their stories provide realworld 

examples of GFOA best practices at work, as 

well as inspiration on how other governments can 

use creative solutions to solve common challenges. 

Read on to learn more. 

City of 

Monrovia 

Town of 

Fulton 

Vermont 

Bond Bank 

Guilford 

County 

TriMet 

Town of 

Pecos City 

14

2023 AWARDS FOR EXCELLENCE 

CREATIVE SOLUTION TO A COMMON CHALLENGE: 

Water Conservation with Municipal Policy 

CREATIVE SOLUTION TO 

A C O M M O N C H A L L E N G E 

©2023 LEO ACADIA C/O THEISPOT.COM 

City of Monrovia, California 

Monrovia Conserves: A Finance Team’s Approach to Water Conservation 

About the City of Monrovia 

Located in Los Angeles 

County, the City of Monrovia 

is in the foothills of the San 

Gabriel Mountains. Situated 

just east of Los Angeles, 

it is the fourth-oldest incorporated city 

in the county, with over 2,500 historic 

homes and a historic Old Town, which 

has hosted a weekly street fair for 

more than 30 years. Monrovia has been 

used as a setting for filming TV shows, 

movies, and commercials. As of the 2020 

census, the city’s population was 37,931. 

W 

ith the state 

facing a historic 

drought in July 

2021, California’s 

Governor Gavin 

Newsom declared a drought state of 

emergency for 50 counties and urged 

all Californians to reduce their water 

usage by 15% compared to 2020 levels. 

Municipalities across the state brought 

mandatory conservation measures 

to residents in a variety of ways, 

including restrictions and citations. 

The City of Monrovia, though, took an 

unconventional approach by developing 

a water penalty program incorporated 

into its utility billing process. In the 

two years since its introduction, the 

program has helped the city conserve 

nearly 700 million gallons of water 

and achieve a 17% reduction in 

citywide water usage. Here is how other 

governments facing similar constraints 

can utilize a similar approach to think 

creatively about solutions. 

DRASTIC MEASURES FOR A 

DEVASTATING DROUGHT 

Drought conditions during the summer 

of 2021 caused unprecedented water 

shortages throughout California. 

Municipalities across the state 

responded by implementing new water 

restrictions, such as limiting landscape 

irrigation to specific days of the week 

and times of the day and issuing 

citations for violations. By October, the 

historically high temperatures and 

record dry conditions had not let up. In 

response, Governor Newsom issued a 

proclamation banning wasteful water 

practices and expanded the drought 

emergency to include all 58 counties— 

including Los Angeles County. 

Located just east of Los Angeles, 

Monrovia relies heavily on an 

underground aquifer known as the Main 

San Gabriel Basin, which was nearing 

historic lows. Neighboring communities 

and prior agreements offered no relief. 

As City Manager Dylan Feik explained, 



The City of Monrovia relies heavily on the San Gabriel Reservoir, which was nearing historic lows during the summer of 2021. 

“Historically, as Monrovia’s water usage 

crept higher, we’ve had to purchase some 

of our water from neighboring water 

agencies. This was no longer possible.” 

To make matters worse, the public 

was not complying with the governor’s 

request. “We were seeing months when 

our water usage was actually going 

up,” lamented Feik. That was when city 

staff knew they needed to do something 

drastically different to curb usage. 

Between October and December 2021, 

the City drafted language for its own 

mandatory emergency ordinance 

and developed an innovative water 

conservation program. 

CREATING A WATER 

CONSERVATION PLAN 

Following adoption of a mandatory 

emergency ordinance in December of 

2021, staff spent the following 60 days 

educating the community about the new 

and nonconventional water conservation 

strategy tied directly into its water 

utility billing process. The plan required 

a mandatory 10% reduction in water 

consumption by all water customers, 

including residences, commercial 

businesses, churches, and schools. 

“The initial strategy was built on 

the idea that we’re all in this together,” 

explained Feik. The penalty for failing to 

meet the required 10% reduction was a bill 

of two times the cost of each water-billing 

unit. The standard cost per unit (748 

gallons of water) is $2.44. Consequently, 

the penalty was set at $4.88 per unit in 

excess. Penalties for excess water usage 

took effect on the March 2022 utility bills. 

The biggest challenge was addressing 

concerns of fairness. If one resident used 

five units of water and their neighbor 

used 50, assigning a 10% reduction of 

water usage across the board seemed 

unfair. “Some residents had spent their 

own money removing grass lawns and 

installing low-flow fixtures to bring their 

water consumption down. Asking them 

to reduce more was really hard,” Feik 

recalled. The city made the decision, 

however, that everyone would be subject to 

the target, including the city itself. Thus, 

the program became a united citywide 

conservation effort. To address unique 

fairness concerns on an individual bases, 

the city established an appeals process 

for customers who sought to contest their 

penalties. This approach would cover 

special circumstances, like sprinkler or 

pipe breakage, or cases in which residents 

already used so little water that penalties 

for simply maintaining these levels would 

be unreasonable. 

LEANING ON TEAMWORK 

Creating and implementing a brand-new 

water conservation plan was a team effort 

in a state of emergency. Conventional 

water restrictions are all the same—don’t 

water on certain days of the week—and 

this was not going to be the best solution 

for Monrovia. “We like to say ‘let’s do 

what’s best for Monrovia’,” Feik explained. 

“Creating a completely different approach, 

as stressful as it was, allowed each team 

member to combine their individual 

strengths with one another to form a plan 

and build a solution.” 

Just as residents were required to step 

up their water conservation efforts, city 

employees also rose to the challenge of 

implementing the new conservation plan. 

Accounting Assistants April Olson and 

Logan Del Grosso fielded complaints from 

residents and respectfully explained— 

over the phone and at the public payment 

counter—the drought crisis and the purpose 

of the water conservation plan. Payroll 

Technician Milka Munoz and Principal 

Accountant Michie Hernandez coordinated 

the utility billing; they calculated the 

penalty fees and credits and incorporated 

account-specific details into over 11,000 

monthly utility bills. The staff’s detailed 

work helped ensure residents could 

monitor their conservation efforts through 

XINHUA / ALAMY 

16

their monthly utility bill. “The idea 

was to give everybody a graph they 

can look at to understand their usage, 

their target, and how they’re doing in 

relation to that target on their bill,” Feik 

explained. 

Senior Information Systems Analyst 

Lou Valdez designed a custom software 

application that helped bring together 

data from three different enterprise 

systems to better track the appeal 

applications. As a designated Water 

Appeals Team, staff reviewed the excess 

usage penalty appeals in addition to 

regular day-to-day work. “We have a 

team of very capable staff to review 

these items and come up with some 

standard approaches to how we address 

these issues of fairness and equity. And 

we were able to start making some little 

tweaks and adjustments,” explained 

Feik. Lastly, leadership regularly shared 

insights, reports, and presentations 

with the City Council as the city 

demonstrated progress toward the 

conservation mandate. 

TRACKING THE RESULTS 

By spring 2023, citywide water 

consumption was down 20%—exceeding 

the state’s 15% water reduction goal. 

“We’ve collected about $1.3 million 

in penalty revenue,” Feik reported. 

And 100% of the fees are going towards 

further conservation efforts, including 

reimbursing residents for grass 

lawn removal, installing low-flow 

water fixtures and appliances, and 

planting native and drought-resistant 

landscaping. “We’re using it for one-time 

costs that will reduce our dependence 

on water,” Feik explained. Every time a 

resident removed their grass lawn, they 

received a rebate from the City for $4 per 

square foot of lawn removed. “Our rebate 

is the highest in the area. And every 

time we do a turf rebate, we see almost 

60% water reduction.” 

Moving forward, Monrovia is 

looking to invest money to reduce 

water consumption from heavy water 

users such as parks, schools, the local 

cemetery, and historic homes. The 

city is also now providing a water audit 

program for residents so they can better 

understand their individual water usage 

and determine how they can conserve 

even more. In addition, its website also 

Monrovia’s innovative water conservation plan brought citywide water consumption down 20%, exceeding the 

state’s 15% water reduction goal, and brought in about $1.3 million in excess usage penalty revenue. 

“In our approach, we adopt a standard, educate people, 

and then let them govern themselves. Changing 

behavior takes generations. I’m a big believer that 

governments can help solve a lot of problems.” 

provides resources to educate residents on 

water-saving strategies. 

The true innovation was in the approach 

to focus on results. The City assumed 

residents could water however and 

whenever they needed so long as they 

also understood the goal of reducing water 

usage and how that was being measured. 

The city found that residents better and 

more easily governed themselves than 

under an alternative approach in which 

inspectors monitored compliance with 

irrigation schedules, for example. 

The community has embraced this 

program. “I remember talking to an 

84-year-old resident,” Feik recalled. 

“He called while he was on his hands and 

knees removing sod in his front yard. 

He said, ‘Hey, I just wanted you to know 

I’m removing my sod today. Have a good 

day.’ And I thought, that’s it! People did 

buy into this.” 

LESSONS FOR OTHER COMMUNITIES 

Amid rising temperatures, extreme 

drought conditions and population growth, 

communities across the western United 

DYLAN FEIK, MONROVIA CITY MANAGER 

States are struggling with unprecedented 

water shortages. Cities facing water 

scarcity can learn from Monrovia’s 

innovative approach to conservation, 

which Feik explained they call “the 

Monrovia Way.” 

“In our approach, we adopt a standard, 

educate people, and then let them 

govern themselves,” said Feik. Other 

organizations can easily study Monrovia’s 

non-conventional approach by referencing 

all of the city’s materials, documents and 

even copies of utility bills online. 

Change, of course, takes time. 

“Changing behavior takes generations,” 

Feik emphasized, even while explaining 

Monrovia’s success. “I’m a big believer 

that governments can help solve a lot of 

problems,” he added, reflecting on the 

change staff has seen in the community. 

EXPLORE MONROVIA CONSERVES 

See updates, resources, and details on 

Monrovia’s water conservation measures 

online at cityofmonrovia.org/yourgovernment/public-works/water/waterconservation. 


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EXCEPTIONALLY WELL-IMPLEMENTED GFOA BEST PRACTICE: 

Fiscal Resilience and Disaster Preparedness 

EXCEPTIONALLY WELL-IMPLEMENTED 

G FOA BE ST PR AC TICE 

Town of Fulton, Texas 

Navigating Challenges to Build a More Resilient and Prepared Community 

WESTEND61 GMBH / ALAMY; DAVE G. HOUSER / ALAMY 

About the Town of Fulton, Texas 

Located on the Gulf 

Coast and overlooking 

Aransas Bay, the Town 

of Fulton is home 

to just over 1,550 

people. The town’s primary industries 

include tourism and fishing, especially 

for shrimp and oysters. Fulton was 

founded by George Ware Fulton in 1867. 

Since 2017, the Town 

of Fulton, Texas, has 

confronted a one-two 

punch. First, Hurricane 

Harvey roared ashore in 

August 2017, causing widespread 

flooding and damage as it ravaged the 

South Texas coast. And just two years 

later, the COVID-19 pandemic further 

strained this small town with limited 

resources. What could have been 

disastrous, though, instead galvanized 

the government, spurring staff to 

develop newfound resilience through 

fiscal conservatism and strict budget 

adherence. This is the story of how a 

town of 1,550 residents with a team of 

ten employees built outsized financial 

stability, increased transparency, and 

engaged the community. 

FACING CHALLENGING 

CIRCUMSTANCES 

When Hurricane Harvey made landfall 

on the Gulf Coast of Texas on August 

25, 2017, it was the first major storm to 

strike the area since Hurricane Celia 

in 1970. The Town of Fulton took a 

direct hit. With nearly 140 mph winds, 

Harvey destroyed Fulton’s town center 

and business district, the convention 

center, multiple hotels, and the town’s 

famous 1,200-foot fishing pier. 

The town faced the makings of a 

financial crisis, since hotel occupancy 

and sales tax represented Fulton’s 

leading sources of revenue. “We learned 

that they could just disappear,” said 

Steven Robertson, CPA, comptroller 

for the Town of Fulton. Robertson, 

then-Mayor Jimmy Kendrick, and 

the city secretary came together as 

the initial long-term recovery team, 

working together on behalf of Fulton 

with Aransas County and the City of 

Rockport. Initially the county and 

cities intended to apply for public 

assistance grants together, but the joint 

effort would introduce delays that were 

projected to stretch two years or more. 



Fulton’s town center and business district were destroyed and many residents lost their homes when Hurricane Harvey struck the Gulf Coast of Texas on August 25, 2017. 

As a result, Fulton’s leadership began 

procurement for assistance on its own. 

During this period, Robertson oversaw 

Fulton’s financial operations and 

advised the mayor, council members, 

and town staff. 

Many Fulton residents had lost their 

homes in the hurricane. In the wake 

of the storm, elected officials made 

two key decisions intended to reduce 

financial strain. In early 2017, the 

Fulton Town Council had passed an 

ordinance reducing utility rates. The 

council opted not to raise these rates; 

they would remain at 2017 levels 

until October 2021. In addition, in 

September, council members voted to 

reduce property tax rates, which would 

ultimately cost Fulton $100,000 in 

foregone revenue through 2021. 

Fulton’s rigorous fiscal 

responsibility was the backbone of 

its recovery. As Robertson recounted, 

staff and elected officials first focused 

on capturing savings from deferred 

hiring and reduced expenditures such 

as street maintenance and vehicle and 

equipment replacement. The savings 

were used to help build up strategic 

reserves. Fulton staff also practiced 

careful financial management with 

conservative budgeting for sales tax, 

mixed beverage tax, and franchise tax. 

By 2018 and 2019, recovery was 

underway. Ultimately, a combination of 

grants and private funding would help 

Fulton rebuild. This included $5.33 

million in FEMA grants, $4.75 million 

in Community Development Block 

Grants (CDBG), and private funding 

from YETI, the Texas Parks and Wildlife 

Foundation, and the Sid W. Richardson 

Foundation. Additionally, Texas Senate 

Bill 7, passed in 2019, allocated funds 

from the state to help with the local 

cost-share, which ultimately resulted 

in savings of an anticipated $300,000 

for the FEMA projects. “It was a team 

effort to come up with the funds for the 

local cost-share,” said Robertson. 

FACING NEW PRESSURES 

Recovery still takes time, and though 

Fulton staff had worked toward 

financial stability, the onset of the 

COVID-19 pandemic introduced a new 

set of unknowns. In addition, Fulton 

had a leadership change in Mayor Kelli 

Cole, who took office in May 2020. She 

faced an emergent crisis while needing 

to also provide strong leadership on 

fiscal policy and administration. 

“We were still struggling to overcome 

challenges related to grant compliance 

and procurement,” she noted, 

“especially because our team is small 

and had limited experience with large 

grant projects.” 

Unsure of what the pandemic might 

bring, Fulton’s team budgeted revenues 

conservatively and expenditures 

liberally. “We wondered if the economy 

would crash and if people would cease 

traveling altogether,” Robertson recalled. 

In fact, the opposite happened: remote 

work created an opportunity for people 

to travel and even relocate, and Fulton 

suddenly became a prime destination for 

those who had always wanted to live on 

the coast. 

“The boom was so big,” recounted 

Mayor Cole. “It seemed like everyone 

came to visit.” Fulton was still recovering 

from the damage caused by Hurricane 

Harvey. “The influx of visitors initially 

put a strain on our resources,” said 

Robertson. 

STRONGER THAN BEFORE 

During the rebuild and the pandemic, 

Fulton continued to provide essential 

services while also successfully 

managing significant disaster recovery 

efforts and rebuilding key community 

landmarks. Over this period, elected 

officials and finance staff prioritized 

transparency and community 

engagement. Open meetings and 

workshops during the recovery helped 

citizens understand what the town was 

facing and what to expect—and on what 

timeline. This transparency has become 

an established practice in the years 

since, with comprehensive workshops 

during the budget process. In addition, 

Cole leads efforts to actively engage 

residents, addressing their questions and 

concerns and amplifying transparency 

PATRICK RAY DUNN / ALAMY 

20

Left: The Fulton Fishing Pier, one of Fulton’s popular attractions, was rebuilt after being destroyed by Hurricane Harvey in 2017. Right: Boats dock at Fulton Harbor. The 

coastal town has experienced a surge in popularity since the COVID-19 pandemic. 

IMAGE COURTESY OF FACEBOOK.COM/ROCKPORTFULTON; GABBRO / ALAMY 

“We worked really, really 

hard to get to this point. 

We’re all very proud of 

what we were able to do 

for our community. And 

we’re a lot stronger now 

because of what we’ve 

been through.” 

STEVEN ROBERTSON, COMPTROLLER 

when it comes to Fulton’s finances. 

“Fulton welcomes a lot of visitors, but 

we’re a tight-knit community, and 

it’s important to build trust between 

elected officials and citizens whose best 

interests we have at heart,” Cole said. 

The finance team also continued 

building reserves to ensure that 

Fulton has a financial safety net. In 

2017, Fulton staff implemented a fund 

balance policy with a reserves target 

of 90 percent of budgeted expenditures 

for the general fund. “This is a target we 

have achieved,” Robertson noted. With 

its final rebuilding projects on track 

for completion by April 2024, Fulton’s 

finance staff and elected leaders are 

currently reevaluating this established 

policy to include enterprise funds. 

“You have to have reserves,” said 

Kimberly McLain, bookkeeper for 

the Town of Fulton. “We’ve stayed in 

line with our budgeting since 2018,” 

she added. “If you have been through 

something like Harvey, you know 

that you need to be prepared.” 

Fulton’s preparedness has become a 

vital part of the staff’s approach to fiscal 

planning and budgeting. “Every penny 

matters,” Robertson said, “and needs to 

be in line with what you’re planning for.” 

Other organizations, particularly 

those in small towns with limited 

resources, could replicate Fulton’s 

successful practices by focusing on 

fiscal conservatism, strict budget 

adherence, and community engagement 

in financial decisions. 

GFOA BEST PRACTICES 

During its path to recovery after the 

disaster, Fulton staff made use of 

many tools, assistance, and guidelines 

when implementing best practices. 

The town’s staff and leaders leveraged 

FEMA assistance for disaster recovery 

efforts, adhered to GFOA guidelines for 

budgeting and citizen engagement, and 

followed GAAP. This allowed the staff to 

consistently receive unmodified audit 

opinions, a testament to the team’s 

financial management proficiency. 

Fulton’s staff also performed extensive 

research on best practices in disaster 

recovery and financial management, 

using resources from GFOA and other 

reputable sources to inform their 

strategies. 

The team implemented GFOA best 

practices, specifically Fund Balance 

Guidelines for the General Fund, which 

states that “governments should 

establish a formal policy on the level of 

unrestricted fund balance that should be 

maintained in the general fund for GAAP 

and budgetary purposes.” In addition to 

systematically accumulating reserves, 

they strengthened internal controls and 

upheld strict budget adherence. 

While Fulton staff did not specifically 

use this best practice, their strategy for 

recovery covers many of the principles 

of GFOA’s Disaster Preparedness, 

which states that “local jurisdictions 

should incorporate resiliency in the 

capital planning process to produce a 

sustainable community and mitigate the 

effects of disasters.” 

Fulton’s remarkable recovery and 

success were all made possible by 

the community’s small but dedicated 

staff, who quickly adapted to changes, 

kept meticulous accounting records, 

and focused on strong financial 

management. As a result, the town has 

emerged from Hurricane Harvey and the 

COVID-19 pandemic more resilient and 

financially stable than ever. 

“We worked really, really hard to get 

to this point,” Robertson shared. “We’re 

all very proud of what we were able to 

do for our community. And we’re a lot 

stronger now because of what we’ve been 

through.” 





Enhancing Transparency for Borrowers and the Community 


Vermont Bond Bank 

Creating the Vermont State Revolving Fund Loan Database 

About the Vermont Bond Bank 

More than 50 years ago, the Vermont 

General Assembly established the 

Vermont Bond Bank to provide loans 

for local infrastructure projects, 

following a period of facilities 

construction across the state when 

the ability to secure long-term debt 

financing was at risk. Today the Bond 

Bank’s loan programs affect the daily 

lives of Vermonters across the state by 

financing the classrooms, roads, and 

water that make daily life possible. The 

bank holds 504 active loans worth a 

total of $576 million in its Pooled Loan 

Program and more than $240 million in 

the State Revolving Loan Program. 

Like other organizations, 

the Vermont Bond Bank 

is navigating the digital 

transformation imperative. 

The need to provide borrowers 

with transparent and timely data access 

in the face of big changes pushed Bond 

Bank staff to build a database for its State 

Revolving Loan Program. Bringing this 

vision to life challenged the bank’s small 

staff of three, but they succeeded in 

creating a cost-effective solution that 

did not require investment in in-house 

IT staff or major software subscription 

fees. Here is what the Bond Bank staff 

learned, and how other organizations 

can benefit from their success. 

TRANSFORMING DEBT SERVICE 

DATA ACCESSIBILITY 

Municipalities, school districts, and other 

public agencies often face challenges in 

obtaining funding at favorable rates for 

capital projects and maintenance. These 

can include limited borrowing capacity, 

credit rates that vary with financial 

stability, and fluctuating borrowing 

costs, among others. 

Pooled loan providers are a critical 

source of financing for local governments 

and agencies like school districts. They 

lend funds for facilities renovation and 

construction projects (like the Town 

of Middlebury, Vermont, Town Offices 

project, pictured above), road and 

highway improvements, equipment 

purchases, general infrastructure, and 

more. Many of these providers can trace 

their origins to the Vermont Bond Bank. 

When it was created by the Vermont 

General Assembly in 1970, the Bond Bank 

was the first institution of its type in the 

country. Today, similar organizations 

now exist in 11 other states, along with 

many similar financing agencies. These 

organizations provide local governments 

and state agencies with affordable, 

innovative, and appropriate capital. 

One of the Bond Bank’s key loan 

programs is the Clean Water and Drinking 

22

Water State Revolving Funds Program 

(SRF), established in the 1990s. SRF loans 

are made through state and Environmental 

Protection Agency (EPA) funding. These 

are below-market-rate loans for related 

infrastructure and natural resource 

conservation projects across Vermont. 

The Bond Bank jointly administers the 

SRF program with the Vermont Department 

of Environmental Conservation (DEC). 

Trailblazing history aside, the 

Bond Bank was lagging in providing 

increased financial visibility to SRF 

borrowers and the public. Data was 

locked in PDFs and therefore not readily 

accessible. Ultimately, the impetus to 

take a transformational leap forward in 

visibility came from the pandemic. 

In spring 2020, Vermont created a 

host of programs to help residents and 

communities cope with the COVID-19 

pandemic. Working with DEC, the Bond 

Bank helped create the COVID Relief 

Program for SRF borrowers that was 

announced in April 2020. The program 

suspended principal payments and 

waived interest and administration fees 

between June 1, 2020, and May 1, 2021. 

Each amortization schedule had to be 

signed by the State of Vermont Department 

of Environmental Conservation and 

Vermont Bond Bank, with a copy sent to 

the borrower and trustee. The program 

also introduced greater complexity: 

borrowers could decide to defer the 

full payment, pay the principal, or pay 

the full amount, including the waived 

interest and administrative fees. Each 

payment had to be reviewed and posted, 

and the loan had to be re-amortized based 

on the deferral or payment elected. 

Given this change and the associated 

administrative work, staff could see 

the need for a readily accessible and 

timely method to communicate debt 

service schedules to borrowers and 

interested parties. In fact, it would be 

transformative. “In our rural state, 

there are only two governmental 

units that have public credit ratings, 

so the majority of the facilities and 

infrastructure financing is made 

through the Bond Bank,” said Executive 

Director Michael Gaughan. “By putting 

our loan information on our website, 

we could provide an accurate picture 

for borrowers and the public of the 

lending in their communities.” 

ON A MISSION TO BUILD A 

DATABASE 

This situation was an opportunity to 

create change—and greater visibility. 

The organization’s vision was to create 

a usable tool for all amortization 

schedules in this program, with the 

ability to aggregate loans, see overall 

debt service requirements, and export 

relevant information to Excel. 

Controller Elizabeth King joined the 

staff in December 2020, and as she 

described it, “The database was a ‘day 

one’ project for me. I had to learn the SRF 

program and build a working database.” 

Building the tool, though, would be no 

small undertaking. The database would 

ultimately include more than 400 loans 

for approximately 170 borrowers, with a 

significant volume of data that needed 

to be consolidated and summarized. 

The Bond Bank had previously built a 

database for its pooled loan program with 

its local web developer, and the team 

used this prior project as a springboard 

for building the new database. 

As project lead, King embarked on the 

months-long project by using the data 

collected through the Coronavirus Relief 

Program to populate an Excel database. 

Together, finance staff and web developers 

focused on closing knowledge gaps. For 

example, the finance team explained the 

purpose of toggling between a fiscal versus 

a calendar year to the web developers. 

King emphasized that the database 

is built on readily available tools. “The 

tool is built in Excel, without reliance 

on complicated formulas. It uses the ‘ad 

across’ function and some other simple 

formulas.” She noted that the Bond 

Bank team engaged their web vendor to 

integrate the database into their website. 

Gaughan added, “Part of the beauty 

of this project is that it was not 

overly complicated—there was not 

an extensive RFP process involving 

large vendors. With the right expertise 

on our team and with our local web 

vendor, we were able to develop this 

tool for an investment of approximately 

$10,000 in development and ongoing 

hosting and maintenance fees.” 

When completed, the Clean Water 

and Drinking Water SRF amortization 

database allowed both public and 

government borrowers to transparently 

view their SRF loans individually and 

in aggregate—for the first time. The 

database could also handle the added 

complexity in repayment options 

introduced by the relief program. 

Now that the loan data is in Excel 

and updated quarterly, it opens new 

possibilities for visibility and analysis. 

Unlike static financial reports, the 

database provides a real-time look at 

debt within Vermont communities. 

The format also enables drilling down 

on loans that can be used to compare 

loans in similar communities or review 

the debt of an individual community. 

“In our rural state, there are only two governmental units 

that have public credit ratings, so the majority of the 

facilities and infrastructure financing is made through the 

Bond Bank. By putting our loan information on our website, 

we could provide an accurate picture for borrowers and 

the public of the lending in their communities.” 

MICHAEL GAUGHAN, EXECUTIVE DIRECTOR 



Left: The Clean Water and Drinking Water State Revolving Funds (SRF) Program is one of Vermont Bond Bank’s key loan programs, which offers below-market-rate loans 

for natural resource conservation and related infrastructure projects, like the one pictured here. Right: The Vermont Bond Bank’s database includes more than 400 loans 

for approximately 170 borrowers, allowing both public and government borrowers to transparently view their SRF loans individually and in aggregate for the first time. 

A MODEL FOR POOLED LOAN 

PROVIDERS 

When compared with debt management 

tools that can require annual subscription 

fees of more than $50,000—with limited 

or no public access—it is easy to see 

success in this cost-effective in-house 

development. 

Internal and external benefits 

underscore the tool’s success. The 

database has created greater transparency 

for borrowers and community members, 

which is important because the SRF 

program requires an annual appropriation 

from the State of Vermont to meet EPA 

match requirements. More clarity on 

the role SRF debt plays in a community 

can help to garner more support for 

such funding programs, including from 

policymakers viewing the impact in 

their home communities. In addition, 

the model’s easy-to-use data outputs 

can help borrowers improve long-range 

financial planning, which can ultimately 

strengthen their credit profiles. 

“Creating public transparency on what 

a community’s debt looks like is a big 

deal,” Gaughan noted. “The borrowers 

within the SRF program range from 

systems that serve 40 residences up 

to cities with populations of more than 

40,000 people. With this database, we now 

have transparency that didn’t previously 

exist because of inconsistencies between 

system size and professionalization. 

Public transparency on government 

financing is always important—and now 

more is possible for Vermont.” 

Internally, this database has 

improved efficiency. The database has 

also streamlined loan administration, 

cutting down on the need for 

verification of loan balances with 

finance officers, auditors, and the 

general public. A cash flow forecasting 

tool enables more efficient program 

management by optimizing the timing 

of cashflow needs while cutting down 

on time required to reconcile loan 

balances with partners. 

Finally, greater transparency 

helps borrowers improve financial 

management. “We built the database so 

that you could export service schedules 

right next to each other, so anyone can 

see all information related to debt in one 

place. Users can also compare what the 

debt profile of a particular system looks 

like over the life of the loan,” Gaughan 

pointed out. “This kind of visibility 

helps leaders make better decisions on 

borrowing and for their communities.” 

SOLVING COMMON CHALLENGES 

The database project involved 

multiple related challenges that many 

governments face, including: 

• Lack of data access. 

• Lack of understanding of government 

debt profiles. 

• Communication barriers between 

government instrumentalities 

providing services and the diverse 

needs of end users—in this case, 

borrowers, and the public. 

In the case of the SRF database, the 

amortization schedules were stored 

in individual PDFs that kept Bond 

Bank staff, borrowers, and others from 

gaining an aggregate understanding of 

local government debt at individual, 

community, and statewide levels. 

Creating the database unlocked the 

data and enabled it to be exported and 

analyzed, with far-reaching benefits. 

Together the Bond Bank’s two 

databases provide a comprehensive look 

at nearly any Vermont community’s 

current debt profile. “This work provides 

a model for how the public can quickly 

view and understand government debt 

without reliance on traditional financial 

reports,” Gaughan said. 

Ultimately, the Bond Bank team 

members saw the broader value of the 

data to communities, the state, and 

borrowers—and brought their functional 

and technical experience together to 

create the tool. “It is sometimes difficult 

to see the opportunity provided by large 

projects,” King said. “Other organizations 

can and should look at projects to see if 

there are opportunities to achieve longterm 

goals or better communication to 

the public through data.” 

VIEW THE DATABASE 

Explore the database on the Vermont 

Bond Bank’s website at vtbondbank.org/ 

srf-database. Users can view data related 

to all current loans and export select or 

full data via .csv files, and the date of the 

last data update is shown to all users in 

the tool’s right-hand corner. 

IMAGE COURTESY OF CONNECTICUT RIVER CONSERVANCY 

24



Capital Planning and Financial Modeling 


IMAGE COURTESY OF GUILFORD COUNTY SCHOOLS 

Guilford County, North Carolina 

Using Collaboration and Forward-Thinking to Support 21st Century Learning 

About Guilford County 

Founded in 1771 

and located in 

North Carolina’s 

Piedmont region, Guilford County is home 

to 546,101 residents. With more than 10 

municipalities, including Greensboro and 

High Point, Guilford County is the state’s 

third most-populous county. 

F 

ive years ago, Guilford 

County leaders identified 

a significant need for K-12 

school capital construction. 

Their approach to sound 

financial planning was underpinned 

by a collaboration between the County 

Board of Commissioners and the 

Board of Education. These two boards 

have forged a partnership that aligns 

both elected bodies, the community, 

financial experts, and financial 

regulators. The effort has resulted 

in a sustainable funding model that 

supports $2 billion in voter-approved 

general obligation bond borrowing 

authority since 2020. Here is the story 

of how collaboration and innovation 

in financial planning can help other 

communities address large capital 

investment needs. 

IDENTIFYING A MASSIVE NEED 

North Carolina operates under a unique 

school finance system that demands 

partnership between elected boards. 

The state’s system specifies that it 

is the state’s responsibility to fund 

instructional expenses and provide 

a sound basic education to every 

student. County governments have 

statutory responsibility for funding 

capital expenses such as buildings 

and equipment and funding the 

maintenance of those assets. Those 

assets, though, are held and maintained 

by the school systems, which are 

governed by local and independent 

elected boards of education. Created 

nearly a century ago, this school finance 

system shaped today’s structure, in 

which county governments hold the 

debt and raise the capital, but school 



“We agreed on one of our core values—that our 

people matter. This means our residents and 

kids matter, and their learning environments 

matter. The vision of creating good learning 

environments for our kids united us and helped 

us build a collaborative bipartisan process to 

bring that vision to life.” 

systems use the funds as determined 

by their boards. In Guilford County, 

the state’s school finance system— 

and the county’s urgent need for 

facilities modernization—brought 

together the Guilford County Board of 

Commissioners and the Guilford County 

Board of Education. 

Guilford County Schools serve 

more than 73,000 students from pre-K 

to grade 12. The district includes 

over 340 separate schools and other 

administrative buildings that together 

comprise over 12 million square feet 

of space. Many were outdated facilities 

in need of updating, so work began in 

2016 with site visits to all schools—and 

the earliest of what would ultimately be 

more than 90 community meetings and 

presentations. 

In 2018, the Board of Commissioners 

and Board of Education established 

a Joint School Capital Facilities 

Committee—with representatives 

from both boards—to review 

facility conditions and prepare a 

recommendation for future construction 

and renovation needs. The Joint Board of 

Education and Board of Commissioners 

MICHAEL HALFORD, COUNTY MANAGER 

Facility Study (2018/2019) identified 

approximately $1.5 billion in needs. 

The study ranked school and district 

buildings based on facility condition, 

technology infrastructure, and size 

and state of instructional and support 

areas, among other measures. Facilities 

for maintenance, transportation, and 

administration were also included in 

the assessments. 

In a statement announcing the 

findings, then-Superintendent Sharon 

L. Contreras said, “21st-century 

learning requires new ways of designing 

and building schools and classrooms.” 

The findings estimated that the 

total cost of building new schools, 

completing repairs, eliminating 

deferred maintenance, and providing 

adequate funding for ongoing 

maintenance would cost more than 

$6.9 billion over the next 30 years. 

Ultimately, the study became the 

basis for the Board of Education’s $2 

billion School Facilities Master Plan 

(2019), which included items such 

as technology, safety, and security 

updates that fell outside the scope of the 

initial joint facility study. 

FORGING A STRONG PARTNERSHIP 

“Guilford County had not had a 

funding program at a substantial level 

for decades,” said Michael Halford, 

County Manager. “Now this study had 

identified a massive need. One of the 

biggest issues initially was helping 

people understand that the number was 

so large because the county is large, 

with many schools and students.” 

Strong partnership between the two 

boards was essential to communicating 

the vision to the community. “We 

agreed on one of our core values—that 

our people matter. This means our 

residents and kids matter, and their 

learning environments matter,” 

Halford recalled. “The vision of 

creating good learning environments 

for our kids united us and helped 

us build a collaborative bipartisan 

process to bring that vision to life.” 

Central to the work was addressing 

both the current and future capital 

needs and deferred maintenance of 

Guilford County. This came down to 

good enterprise risk management. As 

Halford noted, “There was no way we 

could take on a $2 billion debt load 

and keep our ambulances running, 

for example. We wanted to design a 

stable funding model that fit existing 

revenue sources as much as possible, 

reduced the long-term overall cost of 

new infrastructure for residents, and 

protected other core county services.” 

This vision and collaboration 

became a set of five core guidelines 

for this work, which Halford shared: 

• Address current and future capital 

needs and deferred major maintenance 

in a timely manner to provide adequate 

public facilities and services. 

• Protect the county’s ability 

to provide and enhance other 

services for residents. 

• Design a stable funding model 

that fits existing revenue 

sources as much as possible. 

• Reduce overall cost of infrastructure 

for residents by incorporating a 

more fiscally conservative “payas-you-go” 

model for construction, 

renovation, and maintenance. 

• Limit change in property tax rate to 

provide predictability and stability 

for residents and businesses. 

26

EARNING VOTERS’ APPROVAL… 

TWICE 

With a clear goal identified, the next step 

for the joint committee was to determine 

the priority order for projects. This 

process formed the basis for the master 

capital plan, which the Board of Education 

then used for the initial bond request 

made to county commissioners. With 

the financial pathway in development, 

the boards turned to communicating the 

plan to taxpayers. Halford emphasized 

that a shared vision and consistent 

communication from both boards helped 

them educate the community. “We 

focused on telling a common story in 

Guilford County. Hearing a consistent 

message helped to build trust,” he said. 

The boards and their representatives 

used traditional methods like 

public meetings and existing 

communications channels, but they 

also leaned into partnerships and 

new ideas. These included school 

visits and virtual walkthroughs to 

show citizens the current state of 

county schools—and drive home the 

opportunity to transform them. 

In November 2020, Guilford County 

voters approved $300 million of school 

bonds to fund several of the highest 

priority projects from the $2 billion 

master plan. In April 2021, the Board 

of Commissioners approved the list 

of recommended school projects and 

established $300 million of capital 

project ordinances. The county has 

since issued $120 million in general 

obligation bonds and expects to issue 

$180 million in FY2024. Following the 

November 2020 approval, the boards 

continued to use traditional and digital 

outreach tools to communicate the 

state of county schools to the broader 

community. In May 2022, Guilford 

County voters approved $1.7 billion of 

school bonds to fund the remainder of 

the $2 billion master plan. The County 

asked voters to approve a .25% sales 

and use tax for this purpose, but that 

referendum failed to pass. The bonds are 

funded through increased property tax 

revenues generated from the county’s 

2022 reassessment of property values. 

Kiser Middle 

School 

Kiser Middle School 

will be rebuilt on the 

Grimsley/Kiser campus. 

Estimated budget: 

$55,478,632 

Before Expected Completion: June 2024 

Peck K-8 

Expeditionary 

Learning 

The Peck K-8 Expeditionary 

Learning school will be the 

first of its kind in Guilford 

County. 


$41,323,632 

Before 

Expected Completion: September 2024 

IMAGES COURTESY OF GUILFORD COUNTY SCHOOLS 

Foust Gaming 

& Robotics 

School 

The Foust Robotics and 

Gaming Magnet School 

is the first of its kind in 

Guilford County, and 

one of the first gaming 

and robotics elementary 

schools in the country. 


$41,323,632 

Before 

Expected Completion: August 2024 

Kiser Middle School, Peck Elementary School and Foust Elementary School in Greensboro, NC, are among the facilities that are currently under construction as part of 

Guilford County Board of Education’s $2 billion School Facilities Master Plan. 



In FY23, Guilford County passed a 

new budget that continued the prior 

budget year’s dedicated pledge of 

property tax revenues and an initial 

set-aside of $50 million to offset the 

necessary increased investment in 

school capital. Since then, the county 

has renewed its commitment in FY24 

by maintaining the tax rate and setting 

aside another $51 million for school 

capital. Over time, the county will use 

this funding to smooth out the peaks of 

three tranches of debt issuance totaling 

$565 million each over the course of 

seven years. As debt repayment falls in 

the model’s out years, cash will be used 

to reduce reliance on debt for future 

school capital needs. 

MAKING A ‘GENERATIONAL 

INVESTMENT’ IN EDUCATION 

At $2 billion, the scope of the program 

was massive. In comparison, the 

FY24 Guilford County General 

Fund budget is $840 million and 

the FY24 Guilford County Schools 

operating budget is approximately 

$1 billion. “The financing program 

represents a generational investment 

in K-12 educational facilities in our 

community,” Halford said. 

Several years into the initiative 

and two years into the dedicated 

property tax, the county has authorized 

$523 million in project ordinances 

and collaboratively planned for the 

remaining $1.48 billion spending 

authorization, in addition to issuing the 

General Obligation bonds noted above. 

Guilford County established and is 

maintaining a sound capital plan and 

financing model. This includes a stable 

Visual and 

Performing 

Arts 

Elementary 

Construction is underway 

on this magnet school in 

east Greensboro, which will 

be the first of its kind for 

Guilford County Schools. 


$33,505,256 

and consistent funding source for 

school capital projects, eliminating 

the uncertainty and budget challenges 

that come with ad hoc funding. The 

sustainable funding model also helps 

with better allocation of resources 

and improved infrastructure 

management. With several new or 

replacement schools scheduled to 

open in 2024, students will soon 

begin learning in upgraded, modern 

facilities that have enhanced the 

educational environment. Meanwhile, 

students across the county are already 

benefiting from improvements to 

safety and technology enhancements 

enabled by the bond funds. 

A BLUEPRINT FOR OTHER 

COMMUNITIES 

School infrastructure demands 

consistent investment and 

maintenance. Yet communities across 

the country face pervasive challenges 

in effectively financing and executing 

capital construction projects that 

truly meet evolving needs. It’s why a 

comprehensive funding model and 

ongoing collaboration is so important. 

To be successful, a plan in the Guilford 

model must align stakeholders, balance 

financial considerations, and manage 

and monitor the costs of construction 

and ongoing maintenance. It’s also 

essential to consider future demand: in 

Guilford, the plan and the deployment 

of the $2 billion investment are 

designed to stagger future school 

repair and replacement needs. 

As early as 2020, the project had 

gained recognition statewide for its 

substantial scale and unique financial 

planning approach. In addition, as of 

2022, Guilford County has earned a 

AAA rating from all three bond rating 

agencies. The Moody’s rating specified 

that the rating “reflects the county’s 

strong financial position, supported 

by proactive management and 

comprehensive fiscal planning, and 

manageable pension liabilities.” 

Organizations emulating 

Guilford’s model should seek to invite 

collaboration—as in the joint committee 

model—and prioritize transparency 

and flexibility. Honesty also matters: 

the County Board had to acknowledge 

the underfunding in prior decades of 

school facilities—never an easy thing to 

do as elected officials, but essential in 

this situation. Guilford has shown that 

collaboration can transcend traditional 

governance boundaries and bring 

entities together in pursuit of a common 

goal that benefits an entire community. 

GFOA BEST PRACTICES 

Guilford County staff followed GFOA 

best practices on capital planning 

and infrastructure in building their 

sustainable funding model. This 

includes two best practices. Capital 

Asset Management recommends that 

local, state, and provincial governments 

establish a system for assessing 

capital assets and appropriately plan 

and budget for maintenance and 

replacement needs. Strategies for 

Establishing Capital Asset Renewal and 

Replacement Reserve Policies guides 

governments on adopting a written 

policy on capital reserves for renewal 

and replacement and emphasizes the 

benefits of flexibility that come with 

such reserves. 

Guilford County’s approach went 

beyond building classrooms and 

modernizing structures to find 

consensus between elected boards, 

and between community entities. 

Looking to the future, Halford noted that 

changing conditions like high inflation 

and economic headwinds can introduce 

new challenges. “We made a promise 

to residents, and we’re committed 

to continuing to deliver on it. This 

takes constant monitoring of our plan 

and working with our school system 

partners on everything from cash flow 

to priority needs—today and tomorrow.” 

IMAGE COURTESY OF GUILFORD COUNTY SCHOOLS 

28


Equity in Procurement and Contracting 


Tri-County Metropolitan Transportation 

District of Oregon (TriMet) 

Increasing Small Business Participation on Contracts 


BOB POOL / SHUTTERSTOCK 

About TriMet 

TriMet provides bus, light 

rail, and commuter rail 

service in the Portland, 

Oregon, region. The 

agency was created in 1969 when 

the Portland City Council passed a 

resolution to create it under authority 

granted by the Oregon State Legislature. 

The system averages over 300,000 

rides per weekday and is overseen 

by a seven-person board of directors 

appointed by the state’s governor. As of 

2022, TriMet has about 3,500 employees. 

Since 2020, a heightened 

focus on embracing diversity, 

equity, and inclusion 

has been reshaping how 

organizations do business. 

Diversity, equity, and inclusion are core 

values for the Tri-County Metropolitan 

Transportation District of Oregon 

(TriMet). Implementing principles of 

equity in procurement and contracting, 

though, requires intentionality—and a 

transformational change in practice. 

And change is never easy. This is the 

story of how TriMet took a new approach 

to its contracting policies and processes 

to remove barriers to participation, 

increase healthy competition, and boost 

participation from small businesses. 

CHANGING GOALS, 

CHANGING PRACTICES 

Equity goals are common throughout 

all levels of government. For example, 

shortly after taking office in 2021, 

President Biden set a goal of increasing 

the share of contracts with small 

business participation from 10 to 15% 

by 2025. Many other state and local 

governments also recognize that 

contracting with small businesses in 

the local economy can have a positive 

ripple effect. Not only does this 

generate more competition and better 

results, but it can also reduce the gap in 

business ownership between privileged 

and disadvantaged groups in the 

community. 

As a large buyer of goods and 

services in the Portland region, TriMet 

is in a position to increase the level 

of participation of small businesses 

and companies owned and operated 

by underrepresented people. But 

TriMet needed to think differently 

to encourage more participation by 

community-based organizations 



(CBOs) and Disadvantaged Business 

Enterprises (DBEs) in its procurement 

processes. This year, the time was ripe. 

Recently, public and private 

development work has increased in 

the Portland metro region. Despite 

this increase, TriMet found that its 

solicitations were receiving less 

interest than in the past. Healthy 

competition for contracts is critical to 

obtain the best value and outcomes 

for goods and services. Bringing 

more small businesses into the 

contract bidding process would 

be a win for everyone—positively 

influencing the local economy and 

generating better results for TriMet. 

GOING TO THE CONTRACTORS 

TriMet’s traditional practice for 

soliciting bids or request for proposals 

was to post opportunities on its 

procurement portal and wait for 

contractors to respond. “When you 

post an RFP on the website, you hope 

people will look at it and apply,” 

explained TriMet Chief Financial 

Officer Nancy Young-Oliver. “Even 

in a single project, there can be 

multiple opportunities—like paint and 

electrical—for small businesses.” 

“As civil servants, we are here to serve the community. 

And when you can help break down barriers and 

provide more information or demystify a government 

contract to a small business and then see their 

participation and success—that’s something you want 

to replicate.” 

Historically, TriMet has been 

successful in attracting small 

business participation on large capital 

construction projects. However, 

despite an increase in opportunities— 

including those for subcontractor 

participation—TriMet witnessed 

decreases in the number of DBEs 

that were responding to RFPs or bids 

and competition for projects was 

dwindling. TriMet could no longer 

simply post solicitations and hope 

small businesses would participate. 

It was time to change up the “let 

the contractor come to TriMet” 

approach. Prior to making any 

changes, staff worked to understand 

some of the barriers that smaller 

businesses faced in submitting 

LESTER SPITLER, DIRECTOR OF PROCUREMENT AND SUPPLY CHAIN 

proposals. First, they reached out to 

select small business owners from 

past contracts or their network to 

learn more about what stood in the 

way. The team learned that TriMet 

policies could make it difficult to 

participate and cited specific examples 

including requirements to use 

specific equipment, past experience, 

or capacity. In other cases, TriMet 

administrative practices like billing 

timelines made the work less desirable. 

The TriMet Board of Directions also 

approved an exemption, allowed 

under the Oregon Public Contracting 

Code, to create a “sheltered market” 

for a specific solicitation. This 

provided incentives for State of 

Oregon-certified small businesses. 

YOORAN PARK / ALAMY 

30

IMAGE COURTESY OF TRIMET 

Understanding more about what 

stood in the way helped TriMet staff 

create a new event, the Small Business 

Summit on June 21, 2023, to address 

challenges and increase participation. 

TriMet marketed the summit through 

various communication channels and 

held it at a central location that could 

accommodate a large group. During 

the summit, TriMet project managers 

and two general contractors presented 

opportunities to attendees. 

“It was about meeting them where 

they are,” said Young-Oliver. “And 

it worked. We reached 70 different 

contractors with dozens of opportunities 

in a two-hour window.” The results 

were immediate: after the summit, a 

single RFP received eight applications, 

compared to the average of one or two. 

As Young-Oliver noted, “Now we had a 

real pool of talent to select from.” 

One company in attendance at 

the summit has just been awarded 

a $10 million contract. “It’s a Native 

American-owned and staffed 

company,” said Lester Spitler, Director 

of Procurement and Supply Chain at 

TriMet. “It’s this company’s largest-ever 

prime contract award. And it all came 

from the summit.” 

In addition to educating contractors, 

the summit also proved to be a great 

learning opportunity for TriMet. Staff 

learned that numerous DBEs were not 

able to bid on recent TriMet solicitations 

due to various requirements in the bid 

documents. For example, at the summit 

Young-Oliver spoke with a painter 

who had not applied because he did 

not own a painting booth. This was a 

barrier to entry that TriMet could lower 

by providing a paint booth for use on 

this and future projects. “Here, TriMet 

can provide the infrastructure that’s 

preventing entry,” said Young-Oliver. 

“We’re learning how to shift to open 

up possibilities for greater equity and 

participation.” 

EARNING RECOGNITION AS AN 

‘AGENCY OF CHOICE’ 

TriMet’s goal is to build upon its 

historical reputation as a “public agency 

of choice” for small businesses. “As 

civil servants, we are here to serve the 

community. And when you can help 

break down barriers and provide more 

In addition to their efforts to increase small business participation, TriMet is also a leader in supporting 

Disadvantaged Business Enterprises (DBEs). Raimore Construction was awarded the largest contract for a 

DBE in Oregon for Trimet’s Division Transit Project (pictured above), which was completed in summer 2022. 

information or demystify a government 

contract to a small business and then 

see their participation and success— 

that’s something you want to replicate,” 

said Spitler. 

While TriMet has not yet conducted 

a disparity study, the entire TriMet 

team is proud of the agency’s efforts 

to become more inclusive. Spitler 

noted that project managers have been 

energized by seeing the impact on 

small businesses. 

LOOKING FORWARD 

Going forward, TriMet is planning a 

2024 summit and working to create a 

utilization dashboard that will help 

staff track incremental participation 

improvements over time. The staff 

is also introducing a new initiative, 

which they are calling “Net 15,” to 

address cashflow concerns that 

extended payment terms can introduce 

for small business owners. “We’re 

planning to work with a few select 

DBE vendors and allow them to bill us 

twice a month so we can pay them more 

quickly,” Young-Oliver explained. The 

project is yet another opportunity to 

break down a barrier that might keep 

smaller firms from applying. 

TriMet is also planning to broaden 

the exemption process it used on its 

replacement bus shelters solicitation to 

create an exemption for contracts of a 

certain size. Ultimately, this approach 

can increase opportunities for small 

businesses and support pathways to 

their greater self-sufficiency. By creating 

space for new voices at the table and 

advocating internally and externally 

for their advancement, TriMet aspires 

to continue to be a national leader in 

exemplary contracting and partnership. 

While TriMet has made great strides 

in lowering barriers to entry and 

increasing participation, the team 

acknowledges the work is not done. Also, 

change is rarely easy. “Initially, there 

were questions about why we’re doing 

this—do we have to?” Spitler shared. 

“We answered, ‘because we can, and 

it’s going to get better results.’ We really 

focused on internal communication 

to help everyone understand the 

goal, benefits, and how we could work 

together. And now we have the results to 

back up our efforts.” 

Overall, these efforts by TriMet show 

how diversity, equity, and inclusion 

efforts permeate areas of finance. In 

this case, TriMet was able to change 

procurement and contracting policies 

to help not only achieve goals of greater 

small business participation but also 

support the community that it serves. 





Implementing Automation in Local Government 


Town of Pecos City, Texas 

Putting AI to Work in Financial Reporting 

About the Town of Pecos 

City, Texas 

The Town of Pecos City, 

situated in the river 

valley on the west bank 

of the Pecos River at 

the eastern edge of the 

Chihuahuan Desert in West Texas, is 

known as the home of the world’s first 

rodeo and for its delectable cantaloupe. 

With a recorded population of 12,916 in 

the 2020 census, Pecos serves as a vital 

regional hub for ranching, oil and gas 

production, and agriculture. 

Technology offers tremendous 

promise to transform 

processes, increase precision, 

and improve productivity. 

This is what drew the Town 

of Pecos City, Texas, to the idea of 

implementing AI-driven automation in 

specific financial processes. The result 

has been a significant step forward for 

Pecos, revolutionizing its financial 

management, eliminating monthslong 

delays, and empowering leaders to make 

more informed decisions with real-time, 

data-driven intelligence. Here is how 

other governments can unlock similar 

success. 

CONFRONTING A CONSTELLATION 

OF CHALLENGES 

The Town of Pecos City faced a 

constellation of challenges that exerted 

pressure on the Finance Department. 

The most significant was a staff shortage. 

Vacancies and hiring difficulties 

meant the department struggled to 

effectively manage operations and 

complete essential functions. In 

addition, some of these functions—like 

manual processing of cash receipts and 

reconciliations—were time-consuming 

and error-prone. As the volume of 

financial data grew, the department 

could not keep up. At one point, bank 

reconciliation lagged by as long as nine 

months, which contributed to problems 

like delays in financial reporting, late 

filing fees, and penalties. 

HARNESSING THE POWER OF 

AUTOMATION 

It was clear that a change was needed— 

and that’s when opportunity knocked. 

A consultant who worked on financial 

reporting with the city approached 

staff about piloting the use of robotic 

process automation (RPA), an AI 

technology. The goal was to transform 

operations and solve some of these 

persistent problems. “We’re a small city, 

but I was definitely enthusiastic about 

32

implementing any efficiencies that I 

could into our finance department,” 

said Charles Lino, city manager for 

Pecos City. 

RPA relies on automation to carry 

out tasks and processes like extracting 

data, populating forms, and more. 

Software robots, commonly called ‘bots,’ 

autonomously complete activities and 

transactions across unrelated software 

systems or applications. The bots can 

be deployed for accounting processes 

like recording revenue or completing 

bank reconciliation. Ultimately, 

implementing AI-driven automation 

tools like RPA helps organizations 

realize key benefits including enhanced 

accuracy, expedited reporting, and 

higher efficiency. These in turn help 

companies—and governments—become 

more efficient and make better, moreinformed 

decisions. 

Implementing AI can make people 

nervous, though, largely because of the 

popular concerns about AI technology 

replacing people. And any change can 

make people feel threatened. This is 

why Lino ensured that even a pilot 

venture would be introduced with 

careful communication to create staff 

buy-in. “It can be a bit scary when you 

first introduce the topic of AI. There are 

so many misconceptions and genuine 

concerns about it,” he explained. 

To create buy-in, Lino first met with 

finance staff to explain the goal and 

process, assuring them that the purpose 

of this transformation was, as he put 

it, “to build efficiencies and make their 

lives easier.” This communication 

approach created staff support and they 

moved forward as a team to customize 

the RPA processes to fit the finance 

department’s specific needs. 

Next, the team identified eight 

processes that contained redundancies, 

had caused shortfalls, or contributed 

to ongoing difficulties. These became 

the target areas for implementing 

RPA. Evaluating for potential return 

on investment (ROI) focused on time 

savings over financial metrics. “This is 

about saving countless staff hours that 

can be repurposed,” Lino explained. 

The evaluation had identified 

automation of the accounts payable 

process as the biggest potential project, 

but the prospect was daunting. Instead, 

staff initially focused on what Lino 

called “quick wins.” Automating sales 

tax and daily cash reconciliation 

processes would create immediate 

improvements, unlike starting with the 

AP process. 

With these two targets identified, 

the team moved into detailed process 

mapping. This stage took time, as staff 

precisely scripted their normal routines 

for completing these tasks and shared— 

often via screen share—with the AI 

coders, who programmed the bots 

to replicate these manual processes 

step by step to train them. With 

process mapping complete, the coder 

could focus on testing in a controlled 

environment before implementing the 

new bots to carry out the real processes. 

Deposits—Apply to Accounts 

AP Automation 

AP Automation—Invoice Payment 

Utility Billing—Billing 

Utility Billing—Account Management 

Utility Billing—Data Input 

Records Management 

IT Ticket System Improvements 

SEEING THE RESULTS 

The results surpassed expectations. 

The bot for sales tax reporting, for 

example, was able to run the entire 

process: compile data, reconcile it, log 

onto the state comptroller’s website, 

verify it, and pay the required tax—all 

automatically, and on time, every time. 

This success was especially important 

for consistency and efficiency, and it 

removed the barriers to completion 

caused by staff shortages or absences, 

planned or unplanned. Automation also 

eliminated the penalties and late filing 

fees the city had historically incurred. 

Even better, with the elimination of 

keying errors, accuracy was guaranteed. 

And ROI on staff time savings really 

added up: Process automation saved 

“We’re a small city, but I was definitely enthusiastic 

about implementing any efficiencies that I could 

into our finance department.” 

CHARLES LINO, CITY MANAGER 

Check ACH from Bank—Validate (vendor name) 

—Apply to Tyler Tech, ACH, and NSF Logs 

Capturing Invoices—DE of Invoice Itself 

Part of a Tiered Process 

Water, Sewer, and Landfill (3 Different 

Billing Cycles) 

Account Management (New, Chg, Cut-off) 

Entry to ERP 

Manual and Automated Meter Reading 

Digitize Paper Records and Create 

Codification System 

Use Types to Run Analytics on the Ticketing 

System Currently in Place 

The Town of Pecos City finance staff identified eight processes that contained redundancies, had caused 

shortfalls, or contributed to ongoing difficulties, which then became the target areas for implementing RPA. 



the city’s accounting manager six 

to eight hours a month on the sales 

tax process. Previously, for daily 

cash reconciliations, two part-time 

staff had recorded the transactions 

every two weeks and entered them 

into a spreadsheet for the accounting 

manager to reconcile at the end of 

the month. Now the bot was able to 

reconcile the transactions daily, which 

collectively saved staff up to 32 hours 

a month while eliminating the errors 

that inevitably crop up among tens of 

thousands of monthly transactions. 

Moreover, the bot eliminated the ninemonth 

reconciliation lag that 

had plagued the finance department. 

Now, all reconciliation is up to date. 

“It turned out even better than I 

had anticipated, and our staff is really 

excited,” Lino said. “They no longer 

have to do redundant tasks, and some 

of the more frustrating aspects of their 

jobs have been made significantly 

easier.” 

LESSONS ON IMPLEMENTING 

AI TOOLS 

AI holds tremendous promise when it 

comes to efficiency and accuracy. 

As governments continue to grapple 

with difficulties in hiring and 

retaining staff, organizations can 

use Pecos City’s experience as a 

blueprint for transformation through 

technology. When exploring the 

possibilities for AI and automation, 

Lino suggests these steps: 

• Evaluate the specific challenges 

your organization faces. 

• Seek expertise on potential 

tools and implementation. 

• Customize solutions and processes 

to your organization’s needs. 

• Test your solutions in a 

controlled environment. 

• Make sure everyone knows 

how the system works. Staff 

training helps you make the 

most of your investment. 

• Gather feedback, and monitor, 

refine, and adjust as needed 

to optimize performance. 

In addition, those championing 

technology as a solution should 

emphasize the why and the how of AI 

“We’ve been on this great adventure. Our 

experience automating processes using AI 

technology has been extremely successful, 

and it has put us ahead of other cities our 

size as well as some larger cities in Texas.” 

automation and communicate this 

clearly to staff—the potential and 

possibilities of these tools can improve 

staff experience and performance, not 

detract from it. 

SOLVING COMMON CHALLENGES 

WITH AUTOMATION 

While this project focused on solving 

a common challenge, Lino and his 

team adhered to GFOA best practices 

including Revenue Control Policy and 

Receivables and Handling Receipts 

in the Treasury Office. The Revenue 

Control Policy recommends that 

governments establish a revenue 

control and management policy and 

review it on an annual basis. The 

policy should be customized for the 

size and resources of the government. 

Receivables and Handling Receipts in 

the Treasury Office recommends that 

governments should have written 

policies and procedures for invoicing 

and collection of revenues. 

CHARLES LINO, CITY MANAGER 

Moving forward, Lino is already 

looking for opportunities to use AI 

in other departments, particularly 

with IT and permitting processes. In 

the Finance Department, the next 

big step is tackling accounts payable 

automation—the major challenge 

his team identified in the planning 

phase. Lino’s objective is to eliminate 

paperwork and replace it with 

electronic signatures and approvals 

for a totally paperless AP process. 

“We’ve been on this great 

adventure,” Lino shared. “Our 

experience automating processes 

using AI technology has been 

extremely successful, and it has put 

us ahead of other cities our size as 

well as some larger cities in Texas. 

I’m so proud of what our team has 

accomplished together, and we all feel 

proud of these incredible results.” 

Jara Kern is a marketing strategist at 

Right Angle Studio. 

34

Take another step in your leadership journey. 

Apply to GFOA’s Execuuve Board 

Board members serve a three-year term and participate in three onsite meetings 

per year, plus GFOA’s committee meetings. 

Apply today at gfoa.org 

Applicaaons are due by February 2, 2024.

36

NEURODIVERSITY EMPLOYMENT 

Brain 

The why and how of neurodiversity employment in local government 

BY ANTHONY PACILIO AND MATTHEW PETERS 


Neurodiversity refers to 

the range of differences 

in individual brain 

function and behavioral 

traits including but 

not limited to autism 

spectrum disorder, 

dyslexia, and attention 

deficit/hyperactivity 

disorder (ADHD). An estimated 15 to 

20 percent of the world’s population 

exhibits some form of neurodivergence. 1 

Neurodivergent individuals possess 

a wide range of skills that can solve 

the complex and intricate business 

challenges many organizations 

face, making them invaluable assets 

across various sectors. Their strong 

concentration, superior problemsolving 

abilities, and excellent pattern 

recognition are just some of the skills 

that can be especially beneficial 

in many fields such as technology, 

finance, legal, cybersecurity, and 

healthcare. Despite this, unemployment 

for neurodivergent adults remains 

alarmingly high, with rates reaching 

between 30 and 40 percent. 2 

Recognizing the benefits of 

neurodiversity in the workplace not 

only improves diversity, equity, and 

inclusion (DEI) initiatives, but it 

can also lead to substantial business 

advantages such as increased 

productivity and improved quality 

of work. 

Success by the numbers 

Employers across all industries have 

experienced the direct benefits of hiring 

and placing neurodivergent individuals 

into meaningful careers that align with 

their skillsets. And in the public sector, 

government agencies are employing 

neurodiverse teams. 

One example is a tolling agency that 

needed to verify images of license plates 

captured in toll lanes for commuters who 

were traveling without a transponder. By 

employing neurodivergent individuals, 

the agency was able to identify and 

document at least 350 images per hour. 

In an effort to go completely digital, 

a state’s Department of Transportation 

employed a team of neurodivergent data 

support analysts who uploaded and 

digitized more than 2,000 documents a 

day. With an error rate of less than two 

percent, the team exceeded productivity 

expectations by converting more than 

25,000 documents. 

In the private sector, a wealth 

management firm employed a team of 

neurodivergent employees to improve 

15–20% 

Percentage of the 

world’s population that 

exhibits some form 

of neurodivergence 1 30–40% 

its Power BI dashboards, an analytics 

platform with business intelligence 

(BI) reports. The team introduced 

a daily testing routine for the 

analytics platform, establishing an 

automated testing framework that 

verified more than 75 percent of the 

data within the extraction process. 

They cataloged more than 30 feature 

files—a common file with feature 

descriptions and test scenarios— 

which serve as documentation for the 

Power BI dashboards. With more than 

200 test scenarios and 45 production 

BI reports validated, the company 

saved between 20 to 30 hours of 

manual validation every week. 

Due to the testing coverage, the 

team effectively introduced a daily 

reporting checklist procedure, which 

notified leadership when reports 

were ready to provide more testing 

coverage in the technology stack. 

This daily procedure rectified 

prior problems caused by 

inconsistent reporting and outdated 

data, guaranteeing data integrity. 

The estimated rate 

of unemployment 

for neurodivergent 

adults 2 


NEURODIVERSITY EMPLOYMENT 

Recognizing the benefits of neurodiversity 

in the workplace not only improves DEI 

initiatives, but it can also lead to substantial 

business advantages such as increased 

productivity and improved quality of work. 

These are just a few examples that demonstrate 

how incorporating neurodiversity in the workplace 

can boost innovation and productivity. Not only 

do neurodivergent individuals provide strategic 

business results, but this underemployed 

community is given the opportunity to excel in a 

rewarding career. 

People-first approach 

To deploy and maintain a successful neurodiversity 

employment program, organizations must have 

a people-centric culture. The employers who are 

best positioned for success with a neurodiversity 

employment program understand the importance 

of a DEI culture and are usually equipped with 

employee resource groups (ERG) or business 

resource groups (BRG). ERGs are affinity groups 

that bring awareness and education to their 

communities through fundraising and other events. 

Attracting neurodiverse talent begins on the 

career site and job boards with the job description. 

The language should be inclusive and direct to 

engage neurodiverse talent and make clear the 

requirements and responsibilities. Once the 

candidate is selected for an interview, traditional 

interview barriers may keep neurodivergent 

individuals from showcasing their skills. A handson 

evaluation with a neurodiversity-certified team 

lead in a supportive workplace environment is 

helpful to ensure the candidate is a strong fit. 

However, the support cannot end there. Team 

leads are key components to maintaining an 

inclusive culture. By providing mentorship, 

training, and coaching, neurodiversity-certified 

team leads can help employers achieve increased 

productivity and morale while neurodivergent 

employees establish a strong sense of purpose. 

Paving the way for change 

Neurodiversity employment programs are paving 

the way for change and increasing neurodiversity 

in fields such as technology, legal, healthcare, 

manufacturing, and more. Not only do these programs 

deliver on DEI initiatives, but they also provide a 

strong return with increased innovation, morale, 

and camaraderie through diversity of thought. 

As awareness and adoption of these programs 

continues to grow, the neurodiverse community 

will have more long-lasting, rewarding careers. 

Anthony Pacilio is vice president of CAI Neurodiverse 

Solutions. Matthew Peters is chief technology officer 

for CAI Neurodiverse Solutions. 

1 

Nancy Doyle, “Neurodiversity at work: A biopsychosocial model and 

the impact on working adults,” British Medical Bulletin, September 2020. 

2 

Yesenia Carrero, “The Center for Neurodiversity and Employment” 

Werth Institute for Entrepreneurship and Innovation, September 29, 2021. 


38

MEMBER NETWORKING 

Bringing Large Governments 

Together 

GFOA's Urban Forum (UF) provides an opportunity for members of large 

governments to network and exchange informaaon on topics unique to the 

demands of managing their large and complex ennnes. 

Membership in UF is free and open to GFOA members in large urban areas 

who serve populaaons of 1 million or more. 

JOIN TODAY! 

gfoa.org/uf

Incentives & 

Consequences: 

Are you setting your team up for success? 

BY KATE ZABRISKIE 

40

INCENTIVES AND CONSEQUENCES 

©2023 AAD GOUDAPPEL C/O THEISPOT.COM 

“They want us to give great service, but they 

reduce our bonus if our calls go longer than 

three minutes. I’m not going to lie; I start 

talking faster at the 90-second mark.” 

Incentives and 

consequences have power. 

Are you motivating the 

right behavior, or are you 

encouraging people to act 

in ways you don’t want? 

Misguided incentives or 

misaligned consequences 

have a huge downside— 

but the good news is that 

with a careful thinking, you 

can avoid missteps. 

“She asked me to suggest ideas, so I did. I now 

have a bunch of extra work to do. It’s the last time 

I’m opening my mouth. I didn’t realize offering an 

idea meant signing up to execute it.” 

“We’re supposed to be polite, but most 

people aren’t. Nobody does anything about 

it. I guess that’s how business goes around 

here. I don’t know why I keep trying.” 

THE DOWNSIDE OF MISGUIDED 

INCENTIVES 

Short-term focus. In many cases, 

businesses with misguided incentives 

prioritize short-term gains over 

long-term sustainability. Employees 

who are only rewarded for immediate 

financial results or quick wins may 

overlook the importance of investing in 

innovation, customer satisfaction, and 

employee development. This narrow 

focus can limit the organization’s 

ability to adapt to changing market 

conditions and remain sustainable. 

Do you focus only on here and now, or 

do your incentives and consequences 

take the long term into account? 

Unethical behavior. Misaligned 

incentives can lead to unethical 

behavior within an organization. 

Employees who are rewarded for 

meeting targets, for example, may resort 

to aggressive tactics, dishonesty, or 

cutting corners. This undermines trust, 

harms the company’s reputation, and 

puts it at risk of legal and regulatory 

consequences. What kind of ethics 

do your incentives encourage? 

Silo mentality. Incentives designed 

without considering the broader 

impact on different departments or 

teams can foster a silo mentality. 

When employees are rewarded based 

on individual performance metrics, 

collaboration and knowledge-sharing 

may suffer. This lack of cooperation 

can stifle innovation, impede problemsolving, 

and limit overall organizational 

effectiveness. Do your incentives and 

consequences encourage hoarding and 

silos, or do they promote informationsharing 

and collaboration? 

Demotivation and disengagement. 

Incentives that are meaningless can 

demotivate employees and create a 

sense of disengagement. Employees 

may lose intrinsic motivation and 

become disillusioned if the rewards do 

not align with their values, interests, 

or aspirations, which can result in 

decreased productivity, higher turnover 

rates, and a general decline in morale. Do 

your employees care about the rewards 

or consequences you have in place? 

Tunnel vision. Employees may develop 

tunnel vision when incentives are 

narrowly focused on a single metric 

or objective, ignoring other critical 

aspects of their roles. In the end, 

the choices these employees make 

will most likely lead to customer 

dissatisfaction and reputational harm. 


INCENTIVES AND CONSEQUENCES 

BUILDING EFFECTIVE INCENTIVE 

STRUCTURES 

A strong system that is aligned 

with goals and values and applied 

consistently is the best offense and 

defense an organization can play. 

Align with long-term goals. Think 

about what matters. For example, if a 

department is focused on customer 

satisfaction, incentives should support 

those results. Additionally, there should 

be consequences to address employee 

behaviors that negatively affect 

retention and satisfaction. For instance, 

employees who are rushing interactions 

shouldn’t be rewarded, and ideally, 

managers should address the behavior. 

Foster ethical standards. When people 

do the right thing, they should receive 

recognition. When the opposite occurs, 

management must act quickly to coach 

and correct, or cut ties if the first two 

approaches don’t align the employee’s 

behavior with the organization’s goals. 

When designing incentives, promote both individual 

achievements and collective success, encouraging 

employees to collaborate and share knowledge. 

When unethical behavior is ignored, 

an aggressive cancer can develop. Left 

unchecked, what’s wrong can quickly 

become what’s normal. 

Balance individual and team goals. 

Strike a balance between individual 

performance and team collaboration. 

When designing incentives, promote both 

individual achievements and collective 

success, encouraging employees to 

collaborate and share knowledge. 

Additionally, think about consequences. 

How will you handle those who hoard and 

fail to think about the group’s success? 

Evaluate and adapt. Continuously review 

and evaluate the effects of your choices. 

Solicit feedback from employees, 

monitor unintended consequences, and 

make necessary adjustments to ensure 

incentives remain relevant and aligned 

with evolving organizational goals. 

CONCLUSIONS 

Incentives and consequences are powerful 

tools that can shape employee behavior and 

drive business outcomes. When designed 

and implemented correctly, incentives can 

fuel productivity, innovation, customer 

service, and sales. Furthermore, carefully 

chosen consequences can mean the 

difference between the right choice and the 

wrong one. 

Kate Zabriskie is the president of Business 

Training Works, a talent development firm. 

©2023 AAD GOUDAPPEL C/O THEISPOT.COM 

42

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44

RISK-AWARE RESERVES MANAGEMENT 

Persistence 

Pays Off 

How a decade of risk-aware reserves 

management has benefited the City 

of Sharonville, Ohio 

BY SHAYNE KAVANAGH AND SCOTT MCKEEHAN 


anaging fund balance is a 

concern for governments 

of all sizes, and the City 

of Sharonville, Ohio, is 

no different. What does 

make Sharonville distinct 

from many other local 

governments is its fully “risk aware” 

approach to reserves, which it has 

practiced since 2014. In this article we’ll 

see how that approach to risk has served 

Sharonville and how the city has adapted 

its reserve strategy to its changing risk 

profile over nearly a decade. 

First, though, what is a “risk aware” 

approach to reserves? A reserve is a 

budget and policy tool that describes the 

fungible resources available outside of 

the budget that the government can use 

if the resources appropriated inside of 

the budget are insufficient. Put another 

way, the reserve is insurance against 

unplanned, unavoidable costs or 

revenue losses that can’t be absorbed 

within the regular budget. Reserves 

are therefore a risk management tool, 

and that tool is more effective when it 

is managed based on the risks that a 

reserve may be needed for. 

The City of Sharonville’s journey 

to a risk-aware approach began with 

the 2008 Great Recession, which 

put significant stress on the city’s 

reserves. Many tough budget decisions 

were made, including cutting programs 

and cutting positions as staff retired or 

left voluntarily. The experience made 

city officials realize the importance of 

a structurally balanced budget. 

The city’s budget began to recover 

by 2012, allowing suspended services 

and vacated positions to be restored. 

By 2014, reserves had fully recovered 

and grown beyond pre-recession levels. 

Reserves are essentially a 

risk management tool, and 

that tool is more effective 

when it is managed based 

on the risks that a reserve 

may be needed for. 

It became evident, however, that city 

officials didn’t have a shared vision 

about the amount of reserves the city 

needed, or why. This posed a new 

source of financial risk: unwise use of 

a growing reserve. 

A 2013 report about the risks faced by 

the City of Colorado Springs, Colorado, 

came to the attention of Sharonville city 

officials, and it included a recommended 

reserve range to be prepared for those 

risks. 1 A major risk faced by Colorado 



Springs was the fluctuation of sales 

tax and the large proportion of overall 

revenue sales tax represented. 

Sharonville faced a similar risk with 

its municipal income tax, 2 which is 

vulnerable to recessions and makes 

up a large part of the city’s revenue. In 

fact, the State of Ohio had reduced or 

eliminated several other sources of 

revenue that support local governments, 

which had increased the income tax’s 

share of total city revenue from around 

80 to nearly 90 percent. 

Sharonville had a risk analysis 

conducted in 2014, cataloging and 

analyzing the following risks: 

• In addition to the risks posed by the 

income tax, the city’s other revenues 

were not very stable. Exhibit 1 shows 

the sources of Sharonville’s annual 

revenues from 2006 to 2013, along 

with the proportion of overall revenue 

represented by taxes. The impact of 

the Great Recession can be seen in 

the fluctuation of revenue, during 

which time the city’s budget was down 

around 14 percent and there was a 

decline in the percentage of the city’s 

revenue represented by taxes. 

• A Ford automobile plant is the city’s 

major employer, so a large portion of 

the city’s income tax revenue comes 

from taxes paid by the Ford Motor 

company and its employees. If the 

plant were to shut down, the city 

would have a big hole in its budget. 

Exhibit 2 shows the concentration of 

employment in Sharonville in 2011. 

The area of largest concentration is 

the location of the plant. 

• The city’s labor contracts required 

payouts for accumulated sick leave. 

A large cohort of firefighters was 

projected to retire over the next 16 years, 

which created a risk of expenditure 

volatility. Some of these employees had 

accumulated large unspent balances. 

• The city was at risk of extreme events 

such as flooding, rail accidents, and 

tornados. 

The 2014 analysis suggested the city 

select a reserve target for its general fund 

between $7.2 million and $9.2 million. 

(The details of how this analysis was 

performed are included in the full report, 

available at gfoa.org/risk-analysis.) 

The study provided city officials with a 

unified expectation and goal for the size 

of the city’s reserves. It also helped set 

the stage for several practical benefits of 

a stronger reserve management strategy 

and policy. 

First, there was Sharonville’s growing 

liability for sick leave separation 

benefits. With a large portion of the 

city’s police and fire staff coming on 

board during the 1990s, the projected 

separation benefits for the next 

decade were a mounting burden. Via 

negotiations with bargaining units, a 

policy change was made to significantly 

reduce the amount of unused sick leave 

paid out at retirement for new hires. 

Second, the city identified a ceiling 

amount on desired reserves. As a 

result, when a strong economy helped 

Sharonville replenish its fund balance 

sooner than expected, and then exceed 

the ceiling amount, the city had already 

established a policy for year-end setasides 

from resources above the reserve 

ceiling. The risk analysis highlighted the 

importance of using excess reserves for 

nonrecurring costs, so the city directed 

that money toward paying existing debt 

and funding capital projects. 

EXHIBIT 1 | GENERAL FUND REVENUES (IN THOUSANDS OF DOLLARS) 

Annual Revenue, 2005-2013 (by source) 

Tax Revenue (as a percentage of total annual revenue) 

$16,000 

$14,000 

$12,000 

$10,000 

$8,000 

$6,000 

$4,000 

$2,000 

$0 

2005 2006 2007 2008 2009 2010 2011 2012 2013 

86% 

85% 

84% 

83% 

82% 

81% 

80% 

79% 

78% 

77% 

2005 2006 2007 2008 2009 2010 2011 2012 2013 

Tax revenue 

All other revenue 

2005 2006 2007 2008 2009 2010 2011 2012 2013 

Taxes 13,238 12,923 13,833 12,899 11,789 12,366 13,567 14,059 14,924 

Intergovernmental 941 831 1,138 1,606 966 1,016 897 1,021 1,091 

Charges for Services 416 404 367 292 325 371 341 391 350 

Licenses and Permits 478 444 397 524 467 484 526 533 473 

Investment Earnings 408 694 640 367 40 20 15 18 79 

Fines and Forfeitures 372 376 349 289 301 341 360 384 334 

All Other Revenues 184 96 59 141 214 376 424 274 373 

Total $16,038 $15,766 $16,784 $16,117 $14,102 $14,973 $16,130 $16,680 $17,624 

46

© JONATHAN WEISS, DREAMSTIME.COM 

Third, Sharonville was able to 

leverage its reserves to self-finance 

and capital projects and save interest 

costs. Back in 2014, there was a 

backlog of street maintenance, a 

longstanding desire to construct a 

new police station, and a handful of 

necessary roadway improvements and 

connectivity projects. The city has since 

accomplished many of these projects 

sooner than expected and without any 

long-term financing, and it only had 

to issue a minimal amount of debt to 

help finance a portion of the new police 

station (and that debt has since been 

retired). Sharonville has also been able 

to initiate other new projects sooner and 

at lower costs than would have been 

possible if it were completely dependent 

on outside financing. For example, the 

city is now working on a multimilliondollar 

project to convert a culvert into 

a bridge, which will reduce flooding. 

This project is primarily funded by 

reimbursable grants. Having healthy 

reserves gave the city more assurance 

in taking on this project more easily, 

confident it can cover construction costs 

while awaiting grant reimbursement. 

Two of the practical benefits 

highlighted above contributed to 

lowering the city’s risk profile, as well. 

The change in benefits payout policy 

reduces expenditure volatility, and the 

flooding project reduces catastrophic 

risk exposure. 

In 2021, as Sharonville took stock 

of these accomplishments and began 

making a new five-year capital plan, city 

officials realized that that the results 

of the 2014 analysis were quickly aging 

and that the old fund balance goals may 

no longer be relevant to the evolving 

risks facing the city. Here are three 

examples of new or evolving risks: 

• COVID-19 had shown that the city 

could be vulnerable to declines in its 

hotel tax revenues, which were used 

to help finance a local convention 

center. If hotel taxes came up short, 

the general fund would be on the hook. 

• Trains carrying hazardous materials 

pass through Sharonville—an 

example of an extremely lowprobability 

risk with potentially 

extreme consequences if it were to 

happen. Though the East Palestine, 

Ohio, train derailment took place in 

2023, which was after this analysis, 

it shows the potential damage of a 

large spill. 

• Cyber security risks have become 

salient for all local governments. 

Though Sharonville has a cyber 

insurance policy, the city is still 

responsible for any deductibles or 

damages that exceed policy limits. 

The city did a new analysis of these 

risks and of existing ones like income 

tax vulnerability, employee sick leave 

balances, and the risk of the Ford plant 

closing. And just as the city’s risk 

profile has evolved since 2014, so has 

the approach taken to risk analysis. 

The 2014 project used single 

numbers to represent the potential 

impact of risks—for example, looking 

back at past recessions to determine the 

losses incurred. In Sharonville’s general 

fund, the largest annual decrease in 

EXHIBIT 2 | CONCENTRATION OF EMPLOYMENT, 2011 

the city’s revenues was in 2009, down 

12.5 percent from 2008. But a historical 

reference point, like 2009, cannot be 

assumed to represent the “worst case.” 

A risk analysis must consider worse 

possible outcomes. At the same time, 

if the city experiences a decrease in 

revenues, it should respond by reducing 

its budget instead of relying on reserves 

to cover the entire amount of the 

reduction. Taking these considerations 

into account produced a reserve amount 

of $2.3 million for recession risk. Each 

risk was analyzed in a similar fashion, 

relying on Sharonville’s historical 

experience or on the experiences of 

comparable municipalities. This singlenumber 

approach is straightforward, 

but it has an important disadvantage. 

“Risks” are uncertain quantities, and 

representing uncertainties as single 

numbers obscures the full range of risk 

the city faces. 3 

Increasingly dark areas of purple indicate where employment is concentrated. Sharonville has 

one area of primary concentration, where Ford Motor company’s Sharonville Transmission Plant 

employs approximately 2,000 people. 

5–397 jobs/sq. mile 

398–1,574 jobs/sq. mile 

1,575–3,535 jobs/sq. mile 

3,536–6,282 jobs/sq. mile 

6,283–9,813 jobs/sq. mile 

1–5 jobs 

6–78 jobs 

79–392 jobs 

393–1,238 jobs 

1,239–3,022 jobs Source: U.S. Census Bureau 



EXHIBIT 3 | CUMULATIVE PROBABILITY CHART 

In 10 years, how confident can the city be that the existing general fund reserve will be enough? 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

$- $5 $10 $15 $20 

To overcome the disadvantages of the 

single method, we must evaluate the full 

range of risk, rather than condensing 

risk down to a single number. This 

method is called “chance-based” 

because we can use the full range of risk 

to determine the chance that any given 

reserve level will be adequate to protect 

against the risks in question. 

The chance-based method allowed 

for a more nuanced look at the risks. We 

can illustrate with the closure of a major 

employer. The 2014 report considered 

only a binary condition where the major 

employer was either closed or operating 

at full capacity. The chance-based model 

considered a range of in-between states 

(such as, curtailment of production, but 

not complete closure) and adjusted the 

risk over different time periods (five 

years in the future versus ten years in the 

future), based on data collected about the 

useful life of the plant. Similar nuance 

was added for all the risks analyzed. 

The chance-based model also allowed 

for a better examination of risks like 

a train derailment. A derailment that 

results in a major spill has a very low 

chance of occurring, but it would have 

catastrophic consequences if it did. The 

single-number method of risk analysis 

does not address these types of risks well, 

but chance-based methods are perfectly 

suited for them. The chance-based 

method can show a range of different 

possible outcomes and the chance that 

the city would be able to financially cope 

with that outcome. 4 

MILLIONS 

To stay above zero 

To stay above 

critical threshold 

Current reserve 

Exhibit 3 shows one of the outputs 

from the chance-based method. This 

“cumulative probability chart” shows the 

chance that any given level of reserves 

would be sufficient over ten years to 

satisfy either of two conditions: 

1. The blue line shows the chance 

reserves will stay above zero, given the 

city’s exposure to all the risks analyzed. 

2. The red line shows the chance that 

reserves will stay above a “critical 

threshold” amount, which is the 

non-zero amount of reserves the city 

would prefer to stay above. It was 

set at $3.5 million, based on rating 

agency expectations for preserving 

the city’s bond rating, among other 

considerations. 

Exhibit 3 shows that the city’s reserve 

in 2021 was sufficient for 75 percent 

confidence to stay above the critical 

threshold. 

The exhibit also shows that reserves 

have a diminishing return at a certain 

point because the flatter the line gets, 

the less confidence an additional dollar 

of reserve “buys.” This is because the 

further to the right you go on the graph, the 

more extreme the events are that must be 

covered by reserves. This graphic shows 

that the city would still get a good “bang for 

the buck” from higher reserves, given the 

size of its existing reserve. This city would 

not be served as well by accumulating 

reserves past the point where the line 

starts to flatten out because more 

reserves do not move the city up as far 

on the vertical axis, which represents 

the chance that the city’s reserves 

will be sufficient to cover losses. 

Neither the blue nor red line ever 

reaches 100 percent confidence, 

instead extending to the right quite a 

bit before crossing the right side of the 

graph. This represents extremely rare 

but extremely consequential outcomes, 

like a severe train derailment. Less 

severe train derailments are included 

in the parts of the line that are to the left 

and lower down. 

Ultimately, Sharonville decided that 

it would benefit from a slightly higher 

reserve target. 5 Though the city was 

facing more risk in some areas (as in, 

hotel taxes), it was also facing less risk 

in other areas—employee sick leave 

liability had become more manageable, 

for example. The new reserve target for 

the general fund was $8.5 million to 

$11 million, which was sufficient to 

give the city 80 to 95 percent confidence 

of being able to address the risks in the 

analysis over the next ten years. 

Finally, the new analysis produced 

a computer simulation that allows 

the city to update important variables 

and produce refreshed analysis as the 

circumstances change. 6 Given the everevolving 

nature and costs of cyber risks, 

manufacturing labor changes, and 

transportation-related environmental 

incidents, the city can better prepare to 

have sufficient reserves and insurance 

coverage and remain risk-aware in the 

years going forward. 

Shayne Kavanagh is GFOA’s senior 

manager, research. Scott McKeehan 

is finance director for the City of 

Sharonville, Ohio. 

1 

“A Risk-Based Analysis of General Fund Reserve 

Requirements: A Case Study of the City of Colorado 

Springs” (available at gfoa.org). 

2 

Ohio is unique in that municipal income tax is 

a significant source of revenue for municipal 

governments across the state. 

3 

Readers who are interested in a fuller explanation 

of the consequences of obscuring the full range of 

risk are invited to read the GFOA report, “Should We 

Rethink Reserves?” (at gfoa.org), which also includes 

explanatory videos. In short, the primary consequence 

is that not understanding the full range of risk makes 

it impossible to truly optimize the total amount of 

reserves a government should seek to maintain. 

4 

Readers who are interested in reading more about the 

analysis are invited to read the full report produced for 

Sharonville at gfoa.org/risk-analysis. 

5 

The 2014 analysis produced a range of $7.7 million and 

$10.1 million, in 2022 dollars. 

6 

A short video explanations of the advantages of 

computer simulation for risk analysis is available at 

gfoa.org/risk-savvy-thinking-about-reserves-videos. 

48

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50 

ROBOTS 

RECORD 

OUR 

REVENUE

ROBOTIC PROCESS AUTOMATION 

IMAGE COURTESY OF WASHTENAW COUNTY TREASURER’S OFFICE 

How the Washtenaw 

County, Michigan, 

Treasurer’s Office 

used robotic process 

automation to save 

time, reduce errors and 

improve the timeliness 

of financial reporting. 

BY CATHERINE MCCLARY 

ABOUT WASHTENAW COUNTY 

Located in Southeast Michigan, 

Washtenaw County has a 

population of about 354,000 

citizens. The county’s two largest 

cities are Ann Arbor and Ypsilanti, 

which are home to two large 

universities– the University of 

Michigan in Ann Arbor and Eastern 

Michigan University in Ypsilanti. 

he Washtenaw County, 

Michigan, Treasurer’s 

Office combined the 

strength of enterprise 

resource planning (ERP) 

and a robotic process 

automation (RPA) tool to improve the 

timeliness and accuracy of revenue 

identification and recording. Since 

launching its new process, the county has: 

• Benefited from detailed, accurate 

revenue receipting that facilitates 

the bank reconciliation process 

and timely financial reporting. 

• Reduced workload with a nearzero 

error rate. 

• Freed up staff for customer-facing work 

and allowed Treasury personnel to 

better manage their transactional work. 

• Used an automated content manager 

to provide additional proof of deposit 

information. 

IDENTIFYING THE NEED 

The Washtenaw County Treasurer 

manages the county’s cash and 

investments, collects delinquent 

property taxes, and records the county’s 

ever-increasing revenue deposits. 

The Treasurer’s receipting model is 

built on centralized depository and 

disbursements functions. 

Washtenaw County went live with 

Enterprise ERP, Cashiering, and Content 

Manager from Tyler Technologies in 2017. 

During the implementation, staff from 

the Treasurer’s Office designed a model 

of three countywide depository bank 

accounts, designated by tender type: 

• ACH and other electronic deposits 

• Credit card deposits 

• Department deposits of cash and 

checks 

This introduced new complexity, but 

it also set the stage for automation 

through the careful design of deposit 

numbering and labels. 

The volume of county deposits has 

grown enormously in recent years. 

The pandemic accelerated the use of 

electronic payments by more county 

customers and funding agencies, 

and the county now uses multiple 

specialized online payment platforms 

and accepts cash, checks, wires, ACH 

deposits, PayPal, and more. 

Getting money into the bank quickly 

is good for internal controls and earning 

interest, but it means that deposits 

are made before being identified and 

without consolidation by county 

staff. The county makes 70+ deposits 

per day, some of which represent all 

the transactions for a department or 

program that day, and others mapping 

to a single payment or grant receipt. 

Each deposit must be identified and 

receipted into the ERP system, often 

using multiple charge codes. 



THE PROCESS 

The county’s first move was selecting 

RPA software. It went with Automation 

Anywhere, a cloud-based bot that runs its 

processes on local machines. The software 

had been used in federal agencies, and 

the county was able to piggyback on the 

federal pricing schedule. The process 

started with one “bot runner” license 

and one “bot developer” license, and 

the county paid for bot-builder training 

and assistance as it built its first bot. 

The county identified deposits 

from its two court systems for its first 

automation project. The courts make 

multiple deposits per day with consistent 

description identifiers (including the 

bank deposit ID). Exhibit 1 shows the 

updated spreadsheet used to track 

daily bank deposits with identification 

logic, using VLOOKUP formulas based 

on bank deposit description, and 

more—which is better than trying to 

remember all the different types of 

deposits. There is an identification 

logic/list in Excel, which makes regular 

updates and additions easier. Exhibits 

2 through 6 show detailed steps for 

taking data from the bank into the ERP. 

THE RPA PROCESS, STEP-BY-STEP 

STEP 1 

STEP 2 

STEP 3 

STEP 4 

STEP 5 

The RPA tool copy/pastes downloaded bank data to a Bank 

Deposit Tracking Excel file (see Exhibit 2). 

The Excel file populates additional columns based on 

VLOOKUP formulas (see Exhibit 3). 

The RPA tool updates department code/identification 

information based on set logic (see Exhibit 4). 

The RPA tool maps designated deposits to create a 

transmittal spreadsheet that assigns charge codes, G/L 

dates, and reference information needed for automated 

receipt entry (see Exhibit 5). 

The RPA tool enters the transmittal receipts into the ERP 

via Payment Entry as a logged-in user (see Exhibit 6). 

(Note: The county plans to implement the Excel import tool 

in Enterprise ERP v2021.) 

EXHIBIT 1 | SPREADSHEET USED TO TRACK DAILY BANK DEPOSITS WITH IDENTIFICATION LOGIC 

EXHIBIT 2 | RPA TOOL COPY/PASTES DOWNLOADED BANK DATA TO EXCEL FILE 

EXHIBIT 3 | EXCEL POPULATES ADDITIONAL COLUMNS 

52

EXHIBIT 4 | RPA TOOL UPDATES DEPARTMENT CODE/IDENTIFICATION INFORMATION 

EXHIBIT 5 | RPA TOOL MAPS DEPOSITS TO CREATE A TRANSMITTAL SPREADSHEET 

EXHIBIT 6 | RPA TOOL ENTERS TRANSMITTAL RECEIPTS INTO ERP 

THE BENEFITS OF BOTS 

The process runs in a fraction of 

the time a person would require, 

with a near-zero error rate. 



GET THE MOST OUT OF RPA 

Look for high-volume 

transaction streams with 

identifiable descriptions 

for the best return on 

upfront automation set-up. 

Expansions were added later, using 

the same steps for another bank 

account. More types of deposits were 

also added, starting with the highvolume 

deposits, and then adding more 

of the lower-volume but easily identified 

deposits. The county will slowly add 

the occasional volume deposits. 

In the future, the county will switch 

the software to a virtual machine from 

a dedicated desktop. It will also: 

• Implement the new Excel import 

tool for miscellaneous receipts 

beginning in Enterprise ERP v2021. 

• Create bot-specific credentials 

to download bank files from file 

transfer protocol (FTP) sites. 

• Explore working with bank data in 

the BAI file format (a file format 

for performing electronic cash 

management balance reporting). 

MEASURING SUCCESS 

Adding an RPA process takes advantage 

of the ERP’s strengths. Charge codes 

map to departmental revenue accounts, 

deposit IDs map to real-world bank 

accounts (balance sheet account in the 

ERP system), and receipt attachments 

in the content management software 

provide additional proof of deposit 

information. Detailed, accurate 

revenue receipting simplifies the 

bank reconciliation process and 

helps make financial reporting 

timely. The county also gauges its 

success by tracking employee time 

saved and comparing error rates. 

Employee time savings is tracked 

in hours. Processes run on a separate 

computer in a fraction of the time a 

person would require, which frees 

staff members for other meaningful 

work at their own workstations. 

Of course, time is still needed to 

initiate the processes, update as 

needed, and troubleshoot occasional 

issues; there is also an investment in 

initial training and development. 

The error rate comparison is done 

in percentages. The automation 

processes work with a near-zero error 

rate, and even if there are problems, 

they are very often quick and easy to 

notice and fix—the process sometimes 

ends either early (not complete/no 

receipts) or is run twice by accident 

(creating duplicate receipts). 

SUGGESTIONS FOR OTHER ENTITIES 

Processes cannot be automated 

successfully until they are understood 

and carefully documented. Washtenaw 

County suggests the following steps: 

• Start with a simple process as 

your first automation project. 

• Write out the process in step-bystep 

detail. 

• Look for high-volume transaction 

streams with identifiable 

descriptions for the best return 

on upfront automation set-up. 

Identify simple, consistent, 

and frequent items to get the 

most out of the new process. 

• Work with your bank to get 

maximum information per 

deposit and to receive your daily 

transaction reports in the format 

you need (likely .csv or .bai2). 

• Start small, then expand. 

Once your team has done its first 

project, you will likely see automation 

opportunities everywhere. If you’re 

working with your IT department, 

they may be able to identify 

opportunities to deploy automation 

for non-financial processes 

throughout your organization. 

Catherine McClary is the treasurer of 

Washtenaw County, Michigan. 

54

In Practice 

FINANCE | ACCOUNTING | PERSPECTIVES | INTERVIEW 

Strategy and Evaluation Leads to Trust and 

Better Decision-Making 

BY ADAM POWELL 

DENVER PUBLIC LIBRARY 

The work of the Strategy and 

Evaluation Team at the 

Denver Public Library (DPL) 

is based on collaboration 

and innovation. The team, 

which has been around since 2018, 

works with staff throughout DPL’s 27 

locations to help the organization make 

plans, tell the story of the impact it has 

on the city, and improve the efficiency 

and effectiveness of its service to the 

community. To fulfill this mission, 

the team also helps identify risks that 

should be addressed in the future. 

For FY 2022, DPL had a $51 million budget 

(denverlibrary.org/content/facts-figures). 

Voters approved a referendum in 2022 that 

will provide an additional $32 million a year. 

About the team 

Kirsten Decker, manager of strategy 

and evaluation, leads the Strategy and 

Evaluation Team, whose primary goal 

is to manage the implementation of the 

strategic roadmap and the new DPL fund. 

Some of the key questions they address 

include how the team can improve its 

intake processes, provide a better level 

of service, and mitigate some of the 

problems and risks they’ve identified 

that haven’t been addressed yet. 

Eric Ward joined DPL at the end of 

2022 as a senior management analyst. 

When employees come to the Strategy 

and Evaluation team with processes 

they’d like to improve, he teaches teams 

about problem solving using the Lean 

framework. He also provides management 

research projects that help executive 

leaders at DPL make better informed 

decisions on pressing topics, explaining 

the implications of potential decisions. 

This often includes the landscape in 

which DPL operates—or would like to. 

Aileen Ayala is the lead data analyst 

on the team and has been with DPL 

since February 2022. Ayala’s primary 

focus is on developing best practices in 

data analysis and data management. 

She explained that she works “on 

creating complex models for strategiclevel 

decision-making, deriving 

system-wide policy and/or procedure 

recommendations, managing our data 

collection process and our data once we 

have it, and then training departments 

and teams on understanding and 

utilizing their own data effectively.” 

Allie Benz is a data analyst for the 

team. She works to make data accessible 

and understandable so DPL staff can do 

their jobs better. Benz said that ensuring 

that the data is accessible is important 

because “many people are super skilled 

in what they do, but numbers aren’t 

necessarily their thing. I try to make that 

less intimidating, so they can take the 

data they have and work with it.” 

Cole Hwa Davis is a project coordinator 

who’s been with the team since February 

2023. Cole works to shepherd the 

funds from a 2022 ballot referendum 

that will provide the library with that 


IN PRACTICE | FINANCE 

additional $32 million a year (for more 

information, see denverlibrary.org/ 

stronglibrary_strongdenver). Hwa Davis 

“handles internal communications, 

project management, tracking, 

reporting, and meeting facilitation.” 

Katie Fox is a senior evaluator for the 

DPL, and she enjoys working on projects 

that measure a program’s effectiveness 

and community responsiveness. For 

example, one of the first questions the 

team addressed was the extent to which 

the library was creating welcoming 

environments for immigrants and 

refugees. “The research ends up being 

pretty qualitative most of the time, 

but that boundary gets a little fuzzy at 

times,” she explained. 

Hanna Jackovich is a management 

analyst on the team, and she works on 

the Evaluation sub-team. She noted, 

“We help with the evaluation over time 

of newer programs, and we’re actually 

going back now to look at programs that 

have never been evaluated.” 

Celia Gottlieb is an AmeriCorps 

Evaluation Volunteers in Service to 

America (VISTA) member and works 

with Jackovich and Fox, focusing 

on the evaluation of youth services 

and developing equity-centered 

practices. Gottlieb and the team “do a 

lot of developing structures to build 

intentional programs and then teaching 

it to folks across the organization, so 

they can align their programs and 

practices with the promising practices 

we’ve identified. This enables strategic 

policies and programming and sets us 

up well to perform evaluations.” 

Fox explained that the Evaluation 

sub-team also helps staff articulate the 

purpose of various services and programs. 

“We spend a lot of time discussing 

questions like, ‘What is the goal of this 

program? How would you know if it was 

working?’ So we do get into some of the 

metrics as well,” she said. 

“This is where collaboration with the 

data team and with employees across 

the organization comes in to make sense 

of the qualitative insights,” Gottlieb 

explained. Fox agreed and said that’s why 

it’s so valuable to have a mix of skillsets 

on the Strategy and Evaluation team. 

New strategies 

The DPL Strategy and Evaluation Team 

goes to great lengths to ensure that 

departments can communicate and 

collaborate with each other. Decker noted 

that this was an issue going back to the 

years before she came aboard. “There have 

been occasional issues with departments 

feeling siloed, so one of my tasks has been 

to make sure those get broken down and 

folks are talking to each other.” 

A key example was implementing the 

DPL Fund at the library. The team, led by 

Cole, worked with subject matter experts 

and specialists across the system to 

identify priority investment areas that 

would be aligned with the objectives of 

DPL’s Strategic Roadmap, which includes 

focusing on capacity, infrastructure, 

compensation, and collection. When 

the library is making investments, 

there is continuous communication 

and intentionality that DPL’s values of 

welcoming, curiosity, connection, equity, 

and stewardship are maintained. 

In addition to touching on core values and 

equity, the Strategy and Evaluation team 

works to maintain focus and streamline 

its efforts. Decker noted this can be 

challenging and requires balance. “How 

do we streamline without jeopardizing 

our accessibility or the trust that we have 

gained from the organization because of our 

accessibility?” she said. 

Challenges and pitfalls 

During new efforts for collaboration, some 

individuals may not always accept the new 

recommendations and may be resistant 

to change. “Kirsten has a philosophy that 

I really appreciate,” Fox said. “We’re not 

going to force ourselves on anyone who’s not 

interested because you can’t really do the 

work with folks who are actively resisting.” 

Fox explained that building trust and 

addressing concerns needs to happen 

throughout the project, but it can be easier 

to manage concerns at the beginning. If 

you don’t take time throughout the project 

to address issues and encourage honesty, 

you can create a situation where you think 

everything went great, but when you reach 

the end of the project, the team doesn’t 

accept the results. 

If there’s any doubt about the accuracy 

of the results toward the end of the project, 

Fox noted, being able to look back and see 

how the recommendations and conclusions 

were made is invaluable. She added that it 

is helpful to remind folks of their specific 

efforts to get to this point and remind them 

of the decisions made collectively by the 

project team. 

It’s possible to misjudge new relationships 

and trust after a successful project, Gottlieb 

said. “Sometimes a project is going well, 

and we have established relationships 

with the people we’re working with. Then 

we come in hot with the same gusto to new 

projects with new folks who may not work 

the same way.” This can be an issue after the 

team completes a very successful project, 

and they’ve learned that it’s important to 

keep in mind that each project is different 

and “requires a humble attitude and an 

understanding that new trust-building 

efforts need to happen.” 

To change those feelings of mistrust, 

Gottlieb said, the team establishes new 

relationships by asking questions. “I try to ask 

a lot of questions and be genuinely curious 

about what somebody might be feeling,” she 

said. This helps her identify pain points and 

opportunities for process improvement. 

56

Paying close attention to detail helps 

overcome these challenges, Decker said. 

“Not everybody comes to the project with 

that same understanding of the real 

commitment that something’s going to 

take. It’s not that they don’t care—it’s just 

that is not how their work works,” she 

explained. 

Building knowledge and skills is a key 

challenge, Decker added. For example, 

the team has a strong collaborative 

relationship with Finance to support 

managers in understanding their 

budgets. “Our team coaches the planning 

that comes after the idea, and we’re there 

to support the implementation once 

funding is awarded,” she explained. “We 

can’t just expect them to be successful 

at managing the complexity of their 

finances if they don’t have the tools to do 

it.” Therefore, they need to help managers 

build the necessary skill sets. 

Finally, Decker pointed to the 

challenge of knowing when to step 

back from certain projects. Sometimes 

projects can’t be completed, for a variety 

of reasons. One example is when the key 

stakeholders are resistant to change and 

are unwilling or unable to accept the 

recommendations for change. “That’s 

the hard part of this work. You have to be 

willing to say, ‘the right answers are not 

enough, so I’m stepping back,’” she said. 

Collaboration and trust 

One of the team’s core beliefs is that 

trust and collaboration go hand-inhand. 

Without efforts to build trust 

among team members, adopting their 

Kirsten Decker hosts a panel at DPL Staff Day. 

proposed recommendations becomes 

much more difficult. The “foot in the 

door strategy” is one of the best ways 

to ensure trust between new team 

members on a project, according to Benz. 

“Making yourself open and vulnerable 

to feedback is incredibly helpful, and 

then from there you can ratchet it up 

toward creating and building that more 

collaborative framework and working 

on larger projects,” she said, adding that 

this strategy is much more likely to work 

than immediately discussing the multimonth 

project schedule and associated 

to-do list. Working on small endeavors 

first helps build trust between new team 

members. 

Ayala tries to ensure that new team 

members understand their value to 

the project. “I try to present myself as 

someone who isn’t an expert in what you 

do, but someone who is an expert in the 

analytics piece. The question becomes 

how we can work together to evaluate 

or answer the questions you have,” she 

said. This strategy helps ensure that 

new team members feel comfortable in 

the beginning phases of the project and 

that trust can be built from there. 

Hwa Davis agreed about the 

importance of reiterating that the team 

is working together toward one goal. 

“Even if we have different perspectives 

or needs during the project or process, 

we are all working together to do 

something to provide for the community 

or to better our services,” he explained. 

This strategy has worked well for him, 

as it helps ensure that all members of 

the team understand what the primary 

goal is and reinforces a feeling of 

commonality and togetherness. 

The team also highlighted the 

importance of understanding other 

peoples’ experiences. “Things feel 

different for people depending on 

where they’re at in the organization 

and what their job is,” Fox said, adding 

that diverse viewpoints should always 

be considered when working on a 

new project. Differences in opinions 

and experience should not only be 

considered, but also validated, she 

explained. 

Last words of advice 

The Strategy and Evaluation team 

consistently attempts to engage with 

different departments and begin new 

projects, ensuring that data is a part of 

the decision-making process in a variety 

of different areas. “Don’t give up,” Hwa 

Davis said. “Improving services for local 

government, using data to drive your 

decisions and improve services to the 

community is incredibly important. It 

can have major impacts on a number of 

critically underserved communities. 

The work is important. It’s hard, and 

it’s challenging. It doesn’t always go 

the way you want, but it can have a real 

positive impact on your community and 

to people’s lives. My advice would be to 

keep going.” 

Jackovich added that you can’t guess 

what the other team members know and 

can contribute—go into meetings with 

no expectations for how individuals 

might be able to contribute, she advised. 

“I’m really trying to stop guessing what 

I think people can help me with or 

contribute to.” 

Finally, Decker is a strong believer 

in clear communication with the 

public. It helps build a sense of trust 

with constituents, especially since 

the surrounding community often 

sees libraries as a place of refuge. “It’s 

imperative to identify and articulate 

the impact of our more traditional 

services, as well as the services that 

have evolved,” she said. “We can 

be a partner at the table when the 

library is tackling large issues in our 

community.” 

Adam Powell is a consultant with GFOA’s 

Research and Consulting Center. 


IN PRACTICE | ACCOUNTING 

ACCOUNTING 

Inside Stories #2 

Accounting and Financial Reporting When Multiple Governments Within One Financial 

Reporting Entity Are a Single Employer for a PEB Plan 

BY MICHELE MARK LEVINE, TODD BUIKEMA, AND SUSANNAH FILIPOVIC 

As we often discuss in 

this space, generally 

accepted accounting 

principles (GAAP) for 

governments set by the 

Governmental Accounting Standards 

Board (GASB) use a financial reporting 

model that is based on the financial 

accountability of elected officials. In 

government, financial statements can 

include any number of legally separate 

governmental entities in cases where 

elected officials of one government are 

financially accountable for the affairs 

of other governments. This is the second 

of several articles exploring some of 

the complexities that arise from this 

special form of consolidation, called 

a financial reporting entity. 1 The first 

article in the series, “Distinguishing 

Between Internal Cash Flows and 

Internal Resource Flows,” was published 

in the October 2023 issue of GFR (gfoa. 

org/gfr-october-2023). For a refresher on 

when and how multiple governments 

should be included in a single financial 

reporting entity, please review the 

article “Puzzling Pieces: Component 

Unit Identification, Classification, 

Disclosure and Display,” GFR, April 2022 

(https://www.gfoa.org/gfr-april-2022). 

Refresher on Defined 

Benefit Postemployment 

Benefits and Plans 2 

Accounting and financial reporting for 

employers’ postemployment benefits 

(PEB) obligations, including both 

pensions and other postemployment 

benefits such as retiree health 

insurance (OPEB), is arguably one of the 

most complex aspects of accounting and 

financial reporting for governments. 

This is particularly the case when those 

obligations are based on the level of 

benefits that beneficiaries will receive, 

called defined benefits. This contrasts 

with defined contribution benefits, an 

obligation for an employer to contribute 

a specific amount of money for each 

employee during the employee’s 

working life, with the final level of 

benefits being determined only by the 

purchasing power of those contributions 

and any investment income or losses 

that may have accrued. For defined 

benefits (DB), many assumptions are 

necessary for an actuary, using complex 

mathematical models, to estimate 

58

what the final actual costs of those 

future defined benefits will be to the 

employers, and to estimate the employer 

contributions that should be made 

to fully fund those costs by the time 

employees retire. 

Most PEB, especially pensions, 

are administered through formal 

arrangements that (1) take in 

contributions, (2) safeguard and invest 

those funds, and (3) use those funds 

to make payments to beneficiaries in 

accordance with the benefit terms. Those 

arrangements, as they pertain to defined 

benefits, are referred to as DB pension 

plans or DB OPEB plans. Contributions 

to DB PEB plans may be received from 

employers, employees, and sometimes 

from third parties called nonemployer 

contributors (such as a state contributing 

to a pension plan covering teachers 

employed by local school districts). Most 

of these plans, especially DB pension 

plans, are administered through trust 

or equivalent arrangements that meet 

GASB’s criteria to be accounted for as 

having their own assets, independent of 

the employers and members, by legally: 

1. Preventing employers and 

nonemployer contributors from 

taking back their contributions 

(contributions are irrevocable), 

2. Limiting the use of plan assets 

exclusively to the payment of plan 

benefits, including administrative 

costs of the plan (assets are dedicated), 

and 

3. Protecting plan assets if any involved 

party goes bankrupt (assets are 

protected). 

Some governments do not use such 

trusts to accumulate and invest 

contributions and to pay benefits. 

Even if those governments otherwise 

set aside resources to pay future 

benefits, because the assets are not in 

trusts that meet these three specified 

criteria, those assets are considered 

to be assets of the government and not 

of the plan, and thus cannot reduce 

the reported PEB liability. As most 

As most governments do use formal pension plans 

administered through trusts that meet the above criteria 

(trusted plans) for defined benefit pensions, this article 

will focus exclusively on such trusted DB PEB plans. 

governments do use formal pension 

plans administered through trusts 

that meet the above criteria (trusted 

plans) for defined benefit pensions, this 

article will focus exclusively on such 

trusted DB PEB plans. 

There are three kinds of trusted 

governmental PEB plans through which 

governments provide DB PEBs: 3 

1. Single-employer plans provide 

benefits only for retirees of a single 

employer, although all individual 

employer governments within a 

single financial reporting entity are 

considered to be a single employer for 

this purpose. 

2. Agent multiple-employer plans 

(agent plans) are those in which many 

employers participate for investment 

and administrative economies of 

scale, but assets contributed by or on 

behalf of each employer’s employees 

are accounted for separately, and 

those assets and the investment 

returns on those assets can only be 

used to pay benefits to retirees of 

that employer. One or more employer 

governments within a single financial 

reporting entity may be a single 

employer for purposes of an agent plan. 

3. Cost-sharing multiple-employer 

plans are those in which many 

employers participate. These plans 

may separately estimate costs and 

have different contribution rates for 

different plan members, but all the 

plan’s assets are legally available 

to pay benefits for any member, 

regardless of employer. Employers in 

cost-sharing plans are therefore also 

sharing risk. 

Accounting and financial 

reporting when multiple 

governments within one 

financial reporting entity 

are a single employer for a 

trusted DB PEB plan 

As mentioned above, multiple legally 

separate governments that are 

included in a single financial reporting 

entity (a primary government and 

one or more of its component units, 

or multiple component units of the 

same primary government) may 

be a single employer in a singleemployer 

plan or in an agent plan. 

Nonetheless, when reported in 

stand-alone financial statements 

of any employer component unit, 

the recognized amounts for PEB 

liabilities and deferred resource 

flows, the note disclosures, and the 

required supplementary information 

(RSI) and notes to RSI, should follow 

the requirements for a cost-sharing 

plan, using the reporting-entity-wide 

amounts provided by the plan as if 

they were the collective amounts for 

all employers in a cost-sharing plan. 4 

The proportionate share for an 

individual government employer 

(such as the primary government or a 

component unit) may be actuarially 

determined by the plan’s actuary as of 

the date of the most recent actuarial 

valuation. However, an actuarial 

determination of proportionate share 

might be a separate actuarial service, 

because—as discussed above—the plan 

recognizes only a single employer for 

the financial reporting entity. If not 

determined actuarially, GAAP requires 

Note to reader: The content in this article is highly abridged and interpreted in an attempt to simplify many complex concepts. 

This article alone should not be relied on by governments in accounting for and reporting postemployment benefit obligations. 


IN PRACTICE | ACCOUNTING 

the use of a ratio. The two options for 

the ratio are: 5 

1. Based on contributions as of the 

most recent plan measurement date: 

a. (The individual government 

employer’s contribution, as 

assessed) / (Total of contributions 

for all the government employers 

within the financial reporting 

entity), 

2. Based on estimated relative longterm 

contributions: 

a. (The individual government 

employer’s projected long-term 

contributions to the pension 

plan) / (Total projected long-term 

contributions of all employers 

within the financial reporting 

entity) 

b. While the latter is preferred, as a 

practical matter it may be difficult 

to estimate future changes in the 

relative contributions of various 

individual employers if not 

actuarially determined. 6 

Note that if a government employer 

provides benefits through more than 

one single-employer or agent DB PEB 

plan for which purpose it is treated 

as part of a single employer, this 

allocation process will need to be 

followed for each such plan. 

To prepare stand-alone financial 

statements, each individual 

government employer that is a 

component unit within the financial 

reporting entity treated as part of the 

single employer for plan purposes will 

need to determine its proportionate 

share, measured as discussed above, 

of key plan amounts. The collective 

amounts that must be allocated are (1) 

net pension/OPEB liability, (2) deferred 

outflows of resources from pension/ 

OPEB, by source, and (3) deferred 

inflows of resources from pension/ 

OPEB, by source. 7 Each component 

unit government that issues standalone 

statements unit will also need to 

measure its pension/OPEB expense for 

the fiscal year, by adjusting the change 

in its net pension/OPEB liability during 

the year by the amounts of current 

year flows that are deferred into future 

periods and the amortization for the 

year of previously deferred resource 

flows. 8 

When the primary government 

prepares its entity-wide statements 

(which are the financial reporting 

entity’s overall financial statements), 

in note disclosures and RSI, it will 

reflect the amounts reported by the 

plan, in total as one plan, and will 

follow the requirements for a singleemployer 

plan or an agent plan, as 

appropriate. However, the net pension/ 

OPEB liability, deferred resource flows 

from pension/OPEB, and pension or 

OPEB expense reported for (1) the 

primary government, including its 

blended component units, and (2) for 

each discretely presented component 

unit (DPCU) that is displayed 

individually, will be that employer’s (or 

group of employers’) proportionate share 

of the total. For DCPUs that are displayed 

in aggregate on the government-wide 

financial statements, the total of the 

included DPCUs’ proportionate shares 

will be reported. 

Exhibit 1 illustrates the way DB PEB 

liabilities and deferred resource flows 

balances should be measured and 

recognized in financial statements of 

a primary government (PG) and in the 

stand-alone financial statements of 

that PG’s component units. Exhibit 2 

similarly illustrates which kind of note 

disclosures, RSI, and notes to RSI should 

be reported with each of those set of 

financial statements. 

The table in Exhibit 3 uses an example 

to summarize this financial reporting 

information and serves as a summary 

for much of this article. 

But before we move on from this 

topic, it’s worth mentioning a closely 

related matter. GFOA’s Certificate of 

Achievement for Excellence in Financial 

EXHIBIT 1 | AMOUNTS REPORTED IN STATEMENTS OF NET POSITION 

City (Entity-Wide) Financials 

Stand-Alone Financials 

Library 

(DCPU) 

Proportionate share 

PG (City 

and library) 

Library 

(DCPU) 

Proportionate shares 

in respective columns 

School 

(BCU) 

Proportionate share 

60

EXHIBIT 2 | NOTE DISCLOSURES, REQUIRED SUPPLEMENTARY INFORMATION (RSI), AND NOTES TO RSI 

City (Entity-Wide) Financials 

Stand-Alone Financials 

Library 

(DCPU) 

Cost sharing plan 

PG (City 

and library) 

Library 

(DCPU) 

One single employer plan 

School 

(BCU) 

Cost sharing plan 

Reporting accepts applications for 

and reviews annual comprehensive 

financial reports (ACFRs) prepared for 

reporting entities that are less than 

a whole government, if the reporting 

entity is accounted for separately 

from the rest of the government in one 

or more individual funds. For these 

reports, if governments allocate PEB 

liabilities to the reported fund(s), we 

require that the government’s PEB 

liabilities and deferred resource flows 

from pension/OPEB are allocated to 

the reporting entity following the 

same approach discussed in this 

article, and the appropriate note 

disclosures and RSI-like tables and 

notes to those tables, as if it too were a 

participant in a cost-sharing plan. 

Watch this space for other Inside 

Stories discussing other topics 

related to activities internal to a 

financial reporting entity or with 

related parties, such as accounting 

for certain complex financial activity 

with blended component units and 

joint ventures. 

Michele Mark Levine is director of 

GFOA’s Technical Services Center. 

Todd Buikema is the assistant director 

of communications for the Technical 

Services Center. Susannah Filipovic is 

manager of technical accounting for the 

Technical Services Center. 

EXHIBIT 3 | EXAMPLE SUMMARY TABLE 

Assumption: A City and its component units, a library and a school, provide defined benefit pensions 

through one trusted single-employer plan. The library is a discretely presented component unit (DPCU) 

and the school is blended component unit (BCU) of the City, which is the primary government (PG). 

In these 

financial 

statements: 

City (financial 

reporting 

entity-wide) 

Stand-alone 

Stand-alone 

Prepared for 

this entity: 

City 

Library, a 

DPCU of the 

City 

School, a 

BCU of the City 

1 

For authoritative guidance on defining a financial reporting 

entity, see GASB Cod. Sec. 2100. 

2 

For complete guidance on employer accounting for definedbenefit 

pension and other postemployment benefits (OPEB) 

provided through trusted plans, see GASB Cod. Sec. P20 for 

pension plans and P50 for OPEB plans. The content in this 

article is highly abridged and interpreted and should not be 

solely relied by governments in accounting for and reporting 

postemployment benefit obligations. 

3 

Accounting and financial reporting by governmental 

employers’ contributions to cost-sharing multiple-employer 

plans that that have no predominant state or local 

government employer (such as tradespeople’s union-run 

ERISA plans), are excluded from this discussion. The criteria 

for identifying this type of plans are found in GASB Cod. 

Sec. P20. 112, and the financial reporting and disclosure 

requirements are found in Cod. Sec. P20.227-.232. 

The Statement of Position 

will report pension 

liabilities and deferred 

resource flows in the 

amount of: 

• Proportionate shares for 

City (PG) and School (BCU), 

in the PG columns, and 

• Proportionate shares for 

Library in DCPU column 

Proportionate shares for 

library 

Proportionate shares for 

school 

4 

GASB Cod. Sec. P20.117, P20.707-1 – .707-3. 

5 

This discussion assumes there are no nonemployer contributors 

on behalf of any of the employers within the financial reporting 

entity. For a complete explanation of the proportionate share 

calculations when there are nonemployer contributors, both for 

those nonemployer contributors in special funding situations 

and those that are not, see GASB Cod. Sec. P20.114-.115, .148a., 

and .185-.193. 

6 

These formulas are adapted from those required of employers 

in cost sharing plans, found in GASB Cod. Sec. P20.148. 

7 

If an individual employer’s proportionate share, as discussed 

below, changes between measurement dates the net effect 

of the change would be measured as discussed in GASB Cod. 

Sec. P20.154, and would be accounted for as an additional 

deferred inflow of resources or deferred outflow of resources, 

as appropriate. 

8 

GASB Cod. Sec. P20.707-1. 

Note Disclosures, required 

supplementary information 

(RSI) and notes to RSI will 

be prepared based on the 

requirements for: 

A single-employer plan, 

using the total amounts 

for the plan 

A cost-sharing plan, using 

the library’s proportionate 

share of the plan amounts 

A cost-sharing plan, using 

the school’s proportionate 

share of the plan amounts 


IN PRACTICE | PERSPECTIVE 

PERSPECTIVE 

The Importance of Protecting 

Auditor Independence 

BY KATHERINE BARRETT AND RICHARD GREENE 

At a time when trust in 

government is a fragile 

commodity, the role of 

state and local government 

auditors has become 

even more important. These people, 

whether through auditing financial 

records, creating reports, or providing 

analysis on internal controls, can help 

support goals to build trust with the 

community. As Kymber Waltmunson, 

auditor for King County,Washington, 

said, “I have always felt that a primary 

goal of my work is to help promote 

trust in government, showing people 

that there’s a watchdog out there 

looking out for the public’s interest.” 

But for auditors to be able to 

accomplish this goal, they must be 

able to function independently, free 

from interference by outside forces 

in government. That’s why multiple 

attacks on auditor independence are 

such a significant issue. “Increasingly, 

truth, integrity, facts, and reality are in 

shorter and shorter supply,” said Josh 

Winfrey, director of the National State 

Auditors Association (NSAA). You must 

have someone you can trust, but for 

people to trust the results of an audit 

shop, it has to have independence.” 

Amanda Noble, auditor for the 

City of Atlanta, Georgia, said, “While 

I don’t have any hard data, it’s my 

impression as chair of the Association 

of Local Government Auditors’ advocacy 

committee that we may have seen an 

increase in threats over the past year, 

which is unexpected, given the relatively 

strong economy.” 

Carolyn Smith was the longest-serving 

auditor for Columbus City Schools, Ohio, 

when she confronted a threat to her 

independence that was intolerable to 

her. “We were doing an audit of building 

conditions, which had been approved by 

the board of education,” she explained. 

“And we intended to use a survey of people 

who worked in the schools to gather 

information. It was a sensitive topic at the 

time, because the teachers’ union had just 

gone out on strike, and one of the things 

they were concerned about were building 

conditions, like cleanliness and problems 

with the air conditioning system.” 

But the survey was attacked by the 

union that represents the district’s 

custodial staff, which felt that its 

©2023 MICHAEL AUSTIN C/O THEISPOT.COM 

62

members were being blamed for the 

condition of the schools. Recalls Smith, 

“The union leadership reached out to the 

board, and the board president reached 

out to me to ask me to pull the survey back 

and not to discuss it. I was told that they 

were going to conduct an investigation. I 

kept trying to get information as to what 

was being investigated and asked if I 

was being targeted. The answer from the 

attorneys was that they wanted to be sure 

I had followed best practices. I viewed this 

as intimidation, particularly because of 

the discussion of an investigation into 

our work. I felt like if I had to walk on 

eggshells, how effective could I be? So, I 

gave notice.” 

For the last several years there have 

been numerous attempts on the part of 

the State of North Dakota Legislature to 

inhibit their auditor’s independence. None 

have been successful, but the attempts 

continue. The Legislature is pressing the 

auditor to stop producing press releases 

and to cut back on the transparency of 

its audits through social media and its 

website. “They want both the auditor’s 

social media outreach and the public 

disclosure on the website to go away,” said 

State Auditor Joshua Gallion. “But I argue 

that this stuff needs to be more readily 

available. Information needs to be out 

there and as timely as possible. It can’t 

just gather dust on a shelf.” 

The elected auditor continues to resist 

the Legislature’s pressure. “I’m exmilitary,” 

he says, “and I have no problem 

standing my ground.” 

Some communities, especially smaller 

ones like the cites of Palo Alto, California; 

Beverly Hills, California; and Glendale, 

Arizona; along with Snohomish County, 

Washington, have turned to contract 

auditors to take the place of appointed 

auditors. Experts in the field fear that this, 

too, can jeopardize the independence of 

the position as well as the quality of the 

work produced. 

The big question here is whether 

the individual or group hiring the 

consultant has a potentially hidden 

agenda pertaining to the audit results. 

If an auditor is working directly for the 

management whose performance is 

being evaluated, it’s hard to ignore the 

possibility that a consultant might put 

too great a priority on trying to please the 

people who are signing the contracts. 

“As trust in government declines, the auditor role is more 

important than it’s ever been.” 

Waltmunson said, “There are concerns 

that consulting firms cut corners and 

their primary interest is their bottom 

line rather than the quality of the work. 

They dilute the influence and the impact 

of the audit function as well as the 

independence of the work done.” 

This phenomenon is vividly illustrated 

by the experience of one former auditor 

in a large local government on the West 

Coast. “In 2022, after a year, I left the 

audit shop in which I was working to find 

some room for advancement,” the auditor 

recalled. “I moved to a consulting firm 

where I was working on anywhere from 

16 to 18 projects, mostly a mix of internal 

audits and performance audits.” 

Disappointing experiences quickly 

emerged. “Sometimes, for example, you’d 

go to do a broad assessment, which was 

supposed to be independent,” he recalls. 

“But you’d be trying to sell other products 

as well. There was a limited process for 

checking for independence. This was 

particularly true when we would report 

– Josh Winfrey, Director of the National State Auditors Association 

directly to someone in management 

for whom you might be doing the other 

work as well, as opposed to reporting to 

an independent body. If you’re working 

for management often, they didn’t 

want a critical audit. In consulting 

there was an implicit understanding 

that you really wanted to please 

the client, and that influenced the 

quality of the work. People would try to 

influence what you were saying. I was 

there for a year and recently left for a 

public sector entity.” 

Frequently, elected officials who 

aim to reduce auditor independence, 

either through contracting out or other 

means, cite budgetary reasons for their 

actions. But this is a short-sighted 

approach, particularly now. As Winfrey 

said, “As trust in government declines, 

the auditor role is more important than 

it’s ever been.” 

Katherine Barrett and Richard Greene 

are principals of Barrett and Greene, Inc. 


IN PRACTICE | PERSPECTIVE 

PERSPECTIVE 

Financial Intelligence through 

Artificial Intelligence 

BY JUSTIN MARLOWE 

Here’s a quick pop quiz: 

throughout 2023, municipal 

bond investors were most 

upbeat about which city? 

An obvious guess is a 

AAA-rated city like Charlotte, North 

Carolina, or Columbus, Ohio. Or a growing 

but affordable hub like Oklahoma City, 

Oklahoma. Or a tech hub like Boston, 

Massachusetts. 

But in fact, the CMF Muni Index from 

the University of Chicago’s Center for 

Municipal Finance tells us the answer 

is…Chicago, Illinois. According to the 

data, the prices of Chicago general 

obligation bonds throughout 2023 

improved more than any other big city. 

Even more surprising is that the worst 

performer was San Francisco, California. 

Prices on its bonds fell more than any 

other big city during that same period. 

Why are investors so optimistic about a 

city that just earned back a BBB credit 

rating, but so pessimistic about a AAArated 

city with one of the strongest local 

tax bases in North America? 

Because in the municipal bond 

market, headlines matter. Chicago 

has made its required pension 

contributions for three consecutive 

years. Most local government chief 

finance officers would not call that 

an inspiring accomplishment, but it’s 

a welcome change for Chicago that’s 

enticed bond investors looking for a 

bargain. Meanwhile, the steady stream 

of bad news about San Francisco’s 

dying, crime-ridden downtown has sent 

many investors streaming for the exits. 

Critics of the municipal bond 

market say this type of reactive, 

news-driven, emotional investing 

is a chronic problem. When bad 

news swamps otherwise sound 

financial fundamentals, taxpayers 

suffer undeservedly through higher 

borrowing costs. 

And yet, we can’t blame municipal 

investors for trading on news when 

other meaningful information is 

so hard to find. Audited financial 

statements often arrive six or more 

months after the fiscal year ends. 

That’s a sharp contrast with the market 

for other fixed-income investments like 

corporate bonds, where investors have 

easy access to timely, frequent, digital, 

comparable financial information. Fair 

or unfair, that’s the quality of financial 

information many investors expect 

from municipal issuers. 

The challenge, then, is clear: how 

can the municipal market supply more 

financial information, in a fast and 

efficient way, about the enormous 

variety of issuer governments? Like 

many other challenges today, the first 

thought is artificial intelligence (AI). 

AI is the science of making machines 

that can think like humans. Since the 

November 2022 release of ChatGPT— 

one of the first large-scale AI tools made 

available to the public—AI has captured 

our collective imagination. More than 

any other technology today, it has the 

potential to transform our everyday 

lives. That’s why it’s no surprise that 

the federal government has asked for 

©2023 DAVIDE BONAZZI C/O THEISPOT.COM 

64

a pause on new AI development, and 

GFOA has launched several initiatives 

to explore its potential across our 

profession. 

Some recent research from the 

University of Chicago’s Center for 

Municipal Finance zeroed in on the lack 

of financial information in the municipal 

bond market. Those researchers asked: 

can AI reliably summarize the narrative 

portion of local government financial 

statements? Municipal credit and buyside 

analysts sort through mountains of 

annual comprehensive financial reports 

(ACFRs) every day to find relevant 

information about a local government’s 

financial performance and fiscal health. 

This task seems like a good candidate 

for AI to scale up quickly and cheaply. 

To test this claim, these researchers 

focused on the two main narrative 

parts of local government annual 

comprehensive financial reports 

(ACFRs)—the Letter of Transmittal (LOT) 

and the Management’s Discussion & 

Analysis (MD&A). They first analyzed 

the LOTs and MD&As for the 50 largest 

U.S. cities across the past four years. 

They calculated their length, the 

level of education required to read 

them, and the number of words that 

convey “positive” sentiment (words 

like “able” or “accomplish”), “negative” 

sentiment (words like “abandon” or 

“abrogate”), and “uncertainty” (words 

like “ambiguous” or “anticipate”). 

Then they asked ChatGPT to 

summarize those same LOTs and MD&As 

and performed that same analysis 

on those summaries. Three main 

findings emerged from this exercise. 

First, ChatGPT is quite good at 

summarizing and simplifying these 

statements. The average MD&A is 

5,581 words long and requires the 

reading skill of someone with a Ph.D. 

The average ChatGPT summary of an 

MD&A is 535 words long and requires 

the reading skill of a typical college 

graduate. We see similar patterns in 

the LOTs and their summaries. 

Second, the summaries tell the same 

story as the originals, but with more 

clarity and emphasis. If an MD&A tells 

Investors do respond to the story that’s told in these 

narratives, but only if someone takes the time to read 

and summarize that story. For generations, that someone 

was a person. Going forward, that someone might be AI. 

a positive story, the summary tells 

a slightly more positive story. If a 

LOT conveys negative sentiment, 

the summarized LOT is slightly more 

negative. Of particular note is that 

negative sentiment is more likely 

to appear in longer statements—the 

proverbial “beat around the bush” 

approach to breaking bad news. 

ChatGPT eliminates the boilerplate 

language and superfluous words that 

often surround negative sentiment. 

Third, and perhaps most important, 

the summaries are salient. These 

researchers used a statistical 

technique known as an “event study” 

to see if the CMF Muni Index for 

an individual city responds to the 

sentiment conveyed in that city’s 

LOT or MD&A. The results show it 

does not; however, the results show 

that a city’s index does respond to 

the sentiment communicated in the 

summaries. In particular, prices on a 

city’s bonds tend to increase when the 

summarized LOT and MD&A convey 

more positive sentiment, and vice 

versa. All this suggests investors 

do respond to the story that’s told in 

these narratives, but only if someone 

takes the time to read and summarize 

that story. For generations, that 

someone was a person. Going 

forward, that someone might be AI. 

If the municipal market can 

produce this information at scale, 

all issuers will benefit. Moreover, 

these results suggest some obvious 

next questions for state and local 

finance practitioners. Can you 

rewrite your LOT and MD&A with 

an eye toward the most favorable 

AI-generated summary? How can 

local finance staff use AI to evaluate 

the financial performance of their 

peer jurisdictions? How might 

state auditors and other regulators 

use AI to summarize and better 

understand broad trends in local 

government financial health? The 

brave new world of AI is full of several 

challenges and opportunities. 

Justin Marlowe is a research professor at 

the University of Chicago, Harris School of 

Public Policy, and a fellow of the National 

Academy of Public Administration. 


IN PRACTICE | INTERVIEW 

WITH CHRIS FORSTER BY MIKE MUCHA 

Mike Mucha, GFOA’s deputy 

executive director, spoke 

with Chris Forster, the 

assistant town manager for 

the Town of Bluffton, South 

Carolina, about his path to a 

job in the public sector, the 

value of GFOA in his career, 

working for a growing 

community, and the 

importance of prioritizing 

professional development. 

Mike: Can you start by describing your 

current role with the Town of Bluffton? 

Chris: I am the assistant town manager, 

and I’m responsible for finance, 

human resources, municipal court, 

economic development, contracts 

and compliance, the Don Ryan Center 

for Innovation—which is the town’s 

business incubator—and diversity, 

equity, and inclusion. I also play a lead 

role in intergovernmental agreements, 

strategic planning, and policy 

development, and I work with the town 

manager on other townwide initiatives 

or leadership issues. The Town of 

Bluffton itself is a growing community, 

and with that comes the ability to work 

on unique projects. 

The town is growing faster than most 

places, isn’t it? 

It is. Before 2000, the population was 

less than 1,000, and the town covered 

less than 1 square mile. Bluffton is a 

very attractive area, a beautiful historic 

town with a welcoming culture that’s 

close to the beaches and near the City 

of Savannah, Georgia. We are the last 

mainland town before you reach Hilton 

Head Island. Growth was pretty fast, 

at first, but then slowed during the 

2009 financial crisis. Growth started to 

accelerate after the recession, and then 

it really exploded during COVID. We 

now have more than 38,000 residents 

and cover an area of 54 square miles. 

My family moved to Bluffton in 2019, 

and it’s a great place to live. I love that 

Bluffton still has a small town feel 

and that it’s near the water. I also grew 

up in a larger city, so it’s nice to have 

Savannah nearby, too. 

From a public finance perspective, 

does this type of rapid growth present 

challenges? 

Two major challenges include affordable 

housing and commercial development, 

both of which are direct consequences 

of our rapid growth. Just as I recognize 

the value of living in Bluffton, others 

do, too, and that demand has driven up 

property values. Overall, this is a pretty 

66

CLOCKWISE FROM LEFT: PHOTO COURTESY OF THE TOWN OF BLUFFTON; MARGARET PALMER / ISTOCKPHOTO.COM; JOHN WOLLWERTH / ALAMY 

affluent community, and for some of our 

longer-tenured residents, their property 

value has gone up to the point where 

they face a difficult decision: to sell for a 

profit or stay and struggle to afford living 

here. And like other towns, growth is 

not uniform. Buckwalter Parkway goes 

north and south through the middle 

of the community. Approximately 51 

percent of our residents live west of 

Buckwalter, but only 17 percent of our 

businesses are located there. When 

you have rapid population growth, 

commercial development can lag and 

leave areas that aren’t as well-serviced. 

How has the town handled this growth 

from a policy perspective? 

We have a few programs that encourage 

commercial development and affordable 

workforce housing. For example, we 

have incentives for service-based 

industries to locate in certain corridors. 

The town has grant programs that can 

assist with several development-related 

costs. The town also has a neighborhood 

assistance program that helps incomequalified 

residents with home repairs to 

help them remain in their homes. 

We’re also trying to take advantage of 

some of this growth and the surpluses 

that have resulted from an increased 

tax base. Historically, we have tried 

to be very conservative with revenue 

projections, especially around revenue 

that is more elastic. During the last 

few years, there have been dramatic 

increases in building permit revenue, 

most of which we didn’t really budget for. 

We recently passed a new reserve policy, 

and because of the surplus, we’ve been 

successful at building up our reserves. 

Our emergency reserve and unassigned 

reserves are 100 percent funded, and our 

capital asset reserve is growing. 

You mentioned that you recently passed 

a new reserve policy, and I would like 

to highlight for everyone that the 

Town of Bluffton won GFOA’s 2022 

Award for Excellence for the work done 

to implement the new reserve policy. 

Thanks. After winning, we’ve done a 

few presentations for GFOA and at other 

conferences. In the presentations I 

usually talk about how when we started 

seeing surpluses, we had a council 

member who inquired about reducing 

taxes. That spurred debate over whether 

it would be better for our community 

to reduce taxes or work on building 

reserves to better promote financial 

sustainability. We researched GFOA’s 

best practices and used other resources 

from GFOA that recommended a 

policy based on the unique risks our 

community faces. With our proximity 

to the coast, we have an elevated risk 

of natural disasters. Using data on 

hurricane risk, we were able to craft a 

policy that sets an appropriate level of 

reserves to face that risk. 

Any updates on the reserve policy or 

notable interactions since the town 

was highlighted? 

In addition to the presentations, a few 

other cities have reached out to get 

advice on their process. One piece I find 

interesting is that almost all wanted 

help with handling the staff and council 

conversations around implementing 

the policy. It seems like the challenge 

for most is not on the technical side but 

instead in how you communicate it. 

The other notable event is that we 

recently went through a rating review. 

Located halfway between Hilton Head Island and Savannah, Georgia, the Town of Bluffton has experienced rapid population growth in 

recent years. Bluffton’s population has increased about 40% since 2020, making it one of South Carolina’s fastest growing municipalities. 



We have been an AA-rated community, 

but after multiple conversations with the 

rating analyst, we were upgraded to AAA. 

In the analysis, the rating agency noted 

our strong management framework and 

financial policies—both referencing our 

process for implementing the reserve 

policy. 

Let’s take a step back and talk about 

how you ended up in Bluffton. Before 

taking your current position, you worked 

for three other very different types of 

government. Is this the career path you 

were expecting when you got into public 

finance? 

Oh no. Not at all. Honestly, until my senior 

year of undergrad at the University of 

Connecticut, I had no idea what I wanted 

to do. I was walking through the student 

union, and someone asked if I wanted to 

sit in on a session to learn more about the 

MPA program. At the time, I knew nothing 

about a Master of Public Administration. 

I ended up applying and getting in, and 

while working toward my MPA, I really 

fell in love with government. I focused 

on financial management and could see 

myself being a CFO for a large city. 

After graduating, I ended up in 

Oklahoma because my wife was in a 

veterinary program at Oklahoma State 

University. I started as a financial 

analyst with the City of Tulsa, Oklahoma, 

in 2008, and soon after, the city had to 

make cuts because of the recession. As 

we went through the budget cuts, my 

role expanded, and I was able to take 

on more responsibilities. Eventually I 

was recruited by the city public works 

director to be the fiscal services officer 

in that department, where I coordinated 

all financial services and budgeting. 

The former auditor for the city was then 

appointed by the governor of Oklahoma to 

be the secretary of finance, and I moved 

over to the state to help lead consolidation 

of IT services and IT infrastructure. 

After we made significant progress on 

Clockwise from top left: Chris accepts the 

Town of Bluffton Award for Excellence in 

2022; Chris with former Massachusetts 

Governor Deval Patrick; Chris makes 

presentation in front of Town Council; Chris 

and his wife, Jessica at the 2023 Hilton Head 

Island-Bluffton Chamber of Commerce Ball; 

and Chris attending dinner for Kennedy 

School of Government at Harvard University. 

68

shared services for IT, we started doing 

the same for financial services. 

Eventually, I applied for a position 

back in Connecticut as the budget 

director with Connecticut State Colleges 

and Universities (CSCU). I didn’t get 

that job, but they had another opening 

that I took, as the controller. They 

were looking to take on a consolidation 

project, and I was able to leverage my 

experience from Oklahoma. After six 

years back in Connecticut, my wife and 

I were ready to relocate to avoid winters 

in the northeast. I actually found the 

Bluffton job post on GFOA’s website. I 

didn’t know anything about Bluffton, 

but I started researching the town and 

saw they were growing. After working 

my entire career in organizations that 

were in constant fiscal stress and making 

cuts, this was the type of opportunity 

that I needed, and we made the move. 

That’s an interesting change of 

environment. What were you able 

to take from your experience in 

Oklahoma and Connecticut that has 

led to success in South Carolina? 

The 1990s were boom times. Many 

governments were going through 

expansion of services. Revenues were 

good. However, in my opinion, there 

wasn’t a lot done to plan for bad times. 

Bluffton was definitely growing, and 

I wanted to be able to help guide and 

build the community in a way that 

would lead to sustained success. 

Share any differences you’ve found 

between working for a state, college 

system, or local government. 

The dynamics are mostly the same. There 

are more people in larger governments, 

and the financial statements have 

bigger numbers. In each place, I think 

my success has been based on an ability 

to establish relationships and adapt— 

although I’m not trying to imply that 

everything always went well. When I 

was with the State of Oklahoma, I was 

able to accomplish a lot in a short period 

of time. The two consolidation projects 

were successful by most metrics. We 

met timelines, and I expected the same 

model to work at CSCU. However, I wasn’t 

ready for the union environment. I 

was naïve and not able to make quick 

progress. It was a humbling experience, 

and one I definitely learned from. I had 

to be more sensitive to many different 

stakeholders. The college environment 

favored decision by committee. Not 

that this approach was better or worse, 

but different. Ultimately, I think that 

helped with my experience when I 

started in Bluffton, and it put me in a 

better place to work with our elected 

officials and other department heads. 

What you said about relationships is 

consistent with stories we’ve heard 

from others, and one reasons GFOA 

has focused resources on helping 

finance officers work better with 

their colleagues from across the 

organization. When and how did 

you first get involved with GFOA? 

I learned about GFOA during my MPA 

program. The University of Connecticut 

had a course centered on the Certified 

Public Finance Officer (CPFO) program 

and brought in Alan Desmarais, who 

was finance director for the Town of 

Manchester. I was also encouraged 

to apply for a scholarship—which I 

received—through the Connecticut 

GFOA. That opened my eyes to what 

was possible in local government. In 

trying to learn more, I got familiar 

with GFOA’s website resources, which 

were available for free. When I joined 

the City of Tulsa, I didn’t become a 

member initially because the city 

wouldn’t pay for membership for 

entry-level staff. I thought it would be 

helpful to my career, though, so I made 

the decision to pay on my own. I also 

joined the CPFO program and was able 

to earn the certification. I’m glad I took 

this on early in my career and earned 

the CPFO when I was 28 years old. 

GFOA’s Certified Public Finance Officers 

(CPFO) program is designed to prepare 

individuals for leadership positions in 

state and local governments by enhancing 

fundamental skills and increasing 

knowledge of best practices and 

standards in public finance. Learn more: 

gfoa.org/cpfo 

Do you feel like the CPFO has 

been helpful in your career? 

Absolutely. Early on, hiring managers 

would ask about it. Some didn’t know 

what it was, but once I explained it, it was 

clear they understood the value. Outside 

of helping me get jobs, it has made me 

a more well-rounded finance officer. 

Like many others, you were able to move 

up to an assistant town manager position 

from a finance background. Do you think 

finance officers have any advantages 

in this position, and do you think the 

CPFO program would help others who 

don’t have a finance background? 

I’ve heard from others that 

understanding finance issues is 

critical for being a town manager. I 

have finance experience, and in some 

ways might even take it for granted. I 

see how the position could be difficult 

if you didn’t have a solid understanding 

of budgeting and accounting. So much 

of what we do depends on being able to 

prioritize resources and ensure that 

we are using our funds effectively. 

Understanding finance is not easy, 

though. I think someone without a 

background in finance would find 

the CPFO program challenging, but 

definitely a good learning experience. 

You have also participated in many 

other educational programs since 

your career started. How have those 

experiences affected your career? 

I enjoy learning and feel that anything 

you can do to develop as an individual is 

beneficial to the organizations you are a 

part of. I believe that the extra learning 

experiences I have had provide a way 

for me to stand out. For some positions, 

a bachelor’s degree is pretty standard. 

For local government finance officers, 

it seems like just about everyone has 

earned a master’s degree. I’m naturally 

thirsty for more information and 

knowledge. At one point, I looked into 

getting a PhD in public administration but 

decided against it. Ultimately, I thought 

I would be better served finding more 

strategic opportunities to develop skills. 

I have benefited from GFOA’s Advanced 

Government Finance Institute (now 

called the GFOA Leadership Academy). 

This program really helped me 

understand the need to transition from 



the technical side of finance to more of 

a leadership role. When I got involved 

with state government, GFOA was 

less prevalent there, so I got involved 

with the Association of Government 

Accountants and earned their certified 

government financial manager (CGFM) 

designation. Now that I’m focused more 

on city management, I’ve been pursuing 

more leadership training and am close 

to earning ICMA’s certified manager 

designation. I’m also just about done 

with the senior executive program at 

the Kennedy School of Government at 

Harvard. 

That is impressive. How do you find time 

to take the training? 

You need to make it a priority. Like I said 

before, I believe strongly that ongoing 

professional development makes our 

organizations stronger. I see others 

making excuses for not taking advantages 

that may be available. The reality is 

that there will always be something. 

Budget season is starting, the auditors 

will be onsite, or there are too many staff 

vacancies. If you’re looking for the perfect 

situation, there will never be enough time 

to fit in professional development. It’s 

important to realize that building skills 

is valuable and not attending the training 

means you are missing out. 

When I worked for the City of Tulsa, my 

passion for city government developed 

and I had a desire to learn, but I found 

it frustrating that budget cuts made it 

difficult to take classes. In government 

we don’t get a bonus, but one perk can 

be the ability to attend professional 

development opportunities—although 

my experience was that when the budget 

got tight, professional development was 

always the first to go. I vowed that when 

I got into a leadership position, it would 

be the last to go, not the first. 

During COVID, we did have to cut the 

budget and restrict out-of-state travel, 

but we kept the budget for in-state 

professional development. Virtual 

options also became popular at that 

time. Having those definitely helped 

us develop solutions for our challenges 

and led to the team we have now. When I 

started as finance director in Bluffton, I 

wanted to make sure that everyone in the 

department understood the importance of 

ongoing education. The department didn’t 

have professional development budgeted 

for everyone, but now every member of 

the finance department has resources to 

attend training. 

You said at some point in your career 

you realized that you needed to focus 

more on leadership development and 

less on technical training. I know that 

other finance officers struggle with this 

balance. Can you say more about how 

you approached the situation? 

For me, there was a natural shift in my 

career. As I moved into a new position 

it was clear that I needed to pick up new 

skills. Looking back now, I think it’s 

essential that leaders recognize the need 

to focus on leadership skills. Some of the 

more unsuccessful leaders I’ve worked 

with held onto the technical aspects of 

their jobs for too long. I understand that 

there can be comfort in continuing to 

build your technical skills, but I think 

the lack of leadership focus led to lower 

morale and higher turnover. 

For finance officers, it seems like there 

is a desire to try to know everything. I 

think it’s OK if people who work for me 

learn things that I don’t know. The role of 

a leader is to find the right people. I think 

the test of any leader is if you can remove 

yourself and still have the organization 

move forward. 

For finance officers who may not 

have access to formal education on 

leadership, what do you recommend for 

building skills? 

In each place that I have worked, I have 

been fortunate to have a mentor whom 

I could work with and who would offer 

suggestions. One mentor who had an 

influence on me was Alex Petit, state CIO. 

When I worked for the State of Oklahoma, 

I came in knowing I was going to be the 

finance officer. I knew the technical role 

and processes. Ultimately the biggest 

obstacle to starting implementation of 

IT consolidation and shared services 

revolved around contracts and budget; 

this forced me into more of a change 

leadership role. Alex pushed me to get 

involved and help solve those problem 

areas. In my mind, this job was different. 

One day we were talking, and I was 

commenting on all the things that we 

now needed to do and how I, as finance 

officer of the IT division, didn’t have the 

authority or influence in the organization 

to make it happen. He looked at me 

and said, “Authority is out there lying in the 

hallway. Go pick it up.” What he was telling me 

was that official authority really didn’t matter. 

Leadership matters, and he needed me to tap 

into a different skillset. I then took a different 

approach to how I worked with the agency 

leaders. It was a turning point in my career. 

As a leader, what type of person do you look 

for when hiring to join your team? 

In every hiring process, I will in some way try 

to evaluate and vet experience and technical 

competency. What I think sets people apart, 

however, is their attitude. Do they have 

a positive outlook? Will they be part of a 

cohesive team? In any organization, mistakes 

will happen. We will face challenges. I value 

people who come to the table with solutions 

rather than complaints and are committed 

to working through problems. To do that, the 

positive attitude is essential. 

Wrapping up our interview, do you have a 

favorite book on leadership? 

I’ll give you two. Good to Great, by James C. 

Collins (HarperCollins, 2001) or Leadership on 

the Line, by Ronald Heifetz and Marty Linsky 

(Harvard Business Review Press, 2017) 

Any speakers or instructors who have 

been memorable? 

I got certified in Lean process improvement 

and took several classes from Fred Shamburg 

(founder and president of Leanovations). 

He had a deep understanding of subject 

matter, but what set him apart was his ability 

to relate it to the practical challenges I was 

facing in government. This was pivotal for me. 

Looking back on your career, do you ever 

think about what you would be doing 

now if you hadn’t happened to be in the 

right place at the right time to join the info 

session on Connecticut’s MPA program? 

I was getting a degree in economics, 

so probably somewhere in that field. 

Maybe in insurance. 

And the last question—for most of us, 

including those in Oklahoma and Connecticut, 

fall is over, and temperatures are getting 

colder. Now that you’ve been in South 

Carolina for four years, is there anything 

you miss about winter? 

Ha. Actually, I always enjoyed the first 

snowfall of the year. 

Mike Mucha is the deputy executive 

director of GFOA. 

70

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10 STEPS 

TO IMPLEMENTING POSITION CONTROL 

One of the best ways to make sure departments aren’t overspending on 

personnel costs is to implement position control, which is a series of linked 

processes ensuring that the characteristics of the positions being filled 

(such as title, salary or wage, grade and step, and so on) match what is 

authorized in the budget and that the number of authorized positions isn’t 

exceeded. Here is a quick checklist to help you develop a position control 

system for your organization. 

1 

Determine the total number 

of positions you have in your 

organization. Identify the job 

that each employee has. For scenarios 

where multiple employees perform 

the same job, you will create multiple 

positions (one for each person) so 

ultimately employees fill positions in a 

1:1 ratio. In some rare scenarios, 

employees with two very different 

part time jobs may have 2 positions. 

2 

Create 

a unique position 

ID for each position. Each 

unique position ID can then 

track information appropriate for the 

position including department, 

funding source, title, and FTE limit 

along with other attributes. 

3 

Group 

similar positions into 

“job classifications.” To 

help manage positions, 

group similar positions (like budget 

analysts, police officers, laborers, HR 

specialists, etc.) into classifications. 

All positions in a similar classification 

would share certain attributes like 

benefit options and pay ranges. 

4 

Establish a central listing of 

all positions. The position 

listing should include current 

information on the position including 

whether it is budgeted and filled for all 

positions in the entire organization, 

including full-time and part time positions. 

If filled, you should identify the employee 

in the position. 

5 

Check 

to ensure compliance. 

When implemented, 

organizations should check to 

ensure that salaries are consistent with 

position limits. Going forward, approval 

processes for new or promoted 

employees should check to exceed that 

FTE limits or pay ranges are not exceeded. 

6 

Commit 

to keeping the position 

control list updated. The 

position control list should 

always be kept current. Organizations 

should develop clear processes for adding 

new positions or modifying positions so 

the centralized position control list is 

always current. When developing a budget 

for the next year, ensure that any changes 

to positions are reflected. 

7 

Develop a process for modifying 

positions. From time to time, 

positions will need to be reclassified 

or specific information on a position will 

need to be updated. Often, the Human 

Resource Department will implement a 

specific process to ensure that positions are 

paid fairly, promote internal equity, and 

accurately reflect current work being done. 

8 

Determine 

who will manage 

the position control structure. 

While Finance, Human Resources, 

and Budget all have an important stake in 

position control, the organization should 

define one group to serve as primary owners 

of the position control responsibilities. 

9 

Decide 

if your organization will 

allow “over-filling” of positions. 

It can be a good idea to hire a new 

candidate before the incumbent has officially 

vacated the position, allowing for training 

time. Establish rules for the types of 

positions that qualify for over-filling and how 

long the new candidate and the incumbent 

can overlap. 

10 

Consider implementing the 

position control structure 

into your ERP system. 

Modern systems provide functionality for 

managing position control to automate 

controls and track any changes to positions 

or the employees filling each position. 

Modern systems also provide tools to help 

with budgeting for positions, including 

adding new positions and applying various 

salary forecasting scenarios. 

72

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